10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER 0-2610

ZIONS BANCORPORATION
(Exact name of Registrant as specified in its charter)

UTAH
(State or other jurisdiction
of incorporation or organization)
87-0227400
(I.R.S. Employer
Identification No.)

ONE SOUTH MAIN, SUITE 1134
SALT LAKE CITY, UTAH
(Address of principal executive offices)

84111
(Zip Code)

Registrant’s telephone number, including area code: (801) 524-4787

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirement for the past 90 days. Yes x No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common Stock, without par value, outstanding at November 5, 2002                                                              90,917,139 shares

ZIONS BANCORPORATION AND SUBSIDIARIES

INDEX

			Page
PART I.	FINANCIAL INFORMATION
	ITEM 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets	3
		Consolidated Statements of Income	4
		Consolidated Statements of Changes in Shareholders’ Equity and Comprehensive Income   (Loss)	6
		Consolidated Statements of Cash Flows	7
		Notes to Consolidated Financial Statements	9
	ITEM 2.	Management’s Discussion and Analysis	16
	ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	35
	ITEM 4.	Controls and Procedures	35
PART II.	OTHER INFORMATION
	ITEM 1.	Legal Proceedings	35
	ITEM 6.	Exhibits and Reports on Form 8-K	35

SIGNATURES	37
CERTIFICATIONS	38

2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (Unaudited)

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)	September 30, 2002		December 31, 2001		September 30, 2001
	(Unaudited)				(Unaudited)
ASSETS
Cash and due from banks	$	1,025,447	$	978,609	$	910,465
Money market investments:
Interest-bearing deposits		1,091		2,780		2,169
Federal funds sold		239,055		57,653		125,112
Security resell agreements		958,098		222,147		507,536
Investment securities:
Held to maturity, at cost (approximate market value $0, $79,752, and        $53,918)		—		79,546		53,880
Available for sale, at market		3,060,160		3,283,915		3,249,657
Trading account, at market (includes $274,031, $87,612, and $277,358        transferred as collateral under repurchase agreements)		366,414		102,896		377,075
		3,426,574		3,466,357		3,680,612
Loans:
Loans held for sale		250,062		297,959		260,698
Loans, leases and other receivables		18,165,833		17,115,485		16,618,504
		18,415,895		17,413,444		16,879,202
Less:
Unearned income and fees, net of related costs		94,544		102,606		102,582
Allowance for loan losses		265,406		260,483		245,862
Net loans		18,055,945		17,050,355		16,530,758
Premises and equipment, net		386,730		368,076		354,637
Goodwill		724,353		770,763		744,033
Core deposit and other intangibles		82,146		109,148		115,666
Other real estate owned		12,625		10,302		15,073
Other assets		1,377,250		1,267,974		1,269,509
	$	26,289,314	$	24,304,164	$	24,255,570
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing demand	$	4,932,736	$	4,480,669	$	4,145,951
Interest-bearing:
Savings and money market		11,138,714		9,507,817		9,482,004
Time under $100,000		1,834,638		2,055,087		2,025,674
Time $100,000 and over		1,459,621		1,664,829		1,688,343
Foreign		115,323		133,288		92,478
		19,481,032		17,841,690		17,434,450
Securities sold, not yet purchased		209,540		87,255		206,638
Federal funds purchased		672,962		1,203,764		1,032,613
Security repurchase agreements		756,426		933,973		1,091,266
Accrued liabilities		634,334		428,225		739,628
Commercial paper		339,575		309,000		429,297
Federal Home Loan Bank advances and other borrowings:
One year or less		512,793		181,266		249,779
Over one year		241,135		240,458		241,770
Long-term debt		1,060,888		781,342		581,348
Total liabilities		23,908,685		22,006,973		22,006,789
Minority interest		23,028		16,322		13,614
Shareholders’ equity:
Capital stock:
Preferred stock, without par value; authorized 3,000,000 shares; issued          and outstanding, none		—		—		—
Common stock, without par value; authorized 350,000,000 shares; issued          and outstanding 91,154,578, 92,208,736, and 92,001,233 shares		1,048,803		1,111,214		1,104,278
Accumulated other comprehensive income		85,361		59,951		74,618
Retained earnings		1,223,437		1,109,704		1,056,271
Total shareholders’ equity		2,357,601		2,280,869		2,235,167
	$	26,289,314	$	24,304,164	$	24,255,570

3

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2002			2001			2002			2001
Interest income:
Interest and fees on loans	$	310,914		$	329,761		$	926,621		$	983,280
Interest on loans held for sale		1,802			2,905			6,729			9,147
Lease financing		5,146			5,918			15,948			16,835
Interest on money market investments		4,507			8,382			12,403			30,043
Interest on securities:
Held to maturity - taxable		—			744			2,292			2,525
Available for sale - taxable		31,669			40,347			99,797			130,227
Available for sale - nontaxable		6,816			6,137			19,823			18,260
Trading account		5,766			7,026			16,679			25,221
Total interest income		366,620			401,220			1,100,292			1,215,538
Interest expense:
Interest on savings and money market deposits		42,948			59,842			124,431			205,765
Interest on time and foreign deposits		27,353			46,609			89,605			146,022
Interest on borrowed funds		35,013			47,651			109,696			165,782
Total interest expense		105,314			154,102			323,732			517,569
Net interest income		261,306			247,118			776,560			697,969
Provision for loan losses		22,309			21,470			56,104			46,477
Net interest income after provision for loan losses		238,997			225,648			720,456			651,492
Noninterest income:
Service charges on deposit accounts		30,368			25,762			88,154			73,221
Loan sales and servicing income		19,792			23,383			46,066			65,155
Other service charges, commissions and fees		20,469			18,699			60,829			54,025
Trust income		4,447			4,158			14,025			13,588
Income from securities conduit		5,188			4,542			13,850			8,590
Market making, trading and nonhedge derivative income		7,427			7,892			31,328			28,801
Equity securities gains (losses), net		(26,452	)		10,267			(25,268	)		40,159
Fixed income securities gains (losses), net		327			158			387			(3,940	)
Other		13,249			11,183			40,875			30,813
Total noninterest income		74,815			106,044			270,246			310,412
Noninterest expense:
Salaries and employee benefits		124,978			110,735			358,708			324,212
Occupancy, net		17,117			16,203			51,163			46,524
Furniture and equipment		15,609			15,643			47,762			44,547
Legal and professional services		5,639			9,278			17,883			23,195
Postage and supplies		6,377			7,154			20,461			20,526
Advertising		3,631			4,933			15,933			17,144
Merger related expense		—			2,902			—			6,173
Restructuring charges		2,691			—			2,691			—
Impairment losses on long-lived assets		3,977			—			3,977			—
Amortization of goodwill		—			8,370			—			23,151
Amortization of core deposit and other intangibles		3,336			3,526			10,008			9,345
Other		35,803			35,838			111,534			107,230
Total noninterest expense		219,158			214,582			640,120			622,047
Income from continuing operations before income             taxes and minority interest		94,654			117,110			350,582			339,857
Income taxes		31,772			43,031			120,744			122,816
Minority interest		(2,486	)		(3,251	)		(3,211	)		(6,638	)
Income from continuing operations		65,368			77,330			233,049			223,679

4

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME (Continued)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
(In thousands, except per share amounts)	2002			2001			2002			2001
Discontinued operations*:
Loss from operations of discontinued subsidiaries	$	(5,199	)	$	(6,357	)	$	(15,125	)	$	(6,903	)
Impairment losses		(28,691	)		—			(28,691	)		—
Income tax benefit		(7,968	)		(1,824	)		(11,919	)		(1,517	)
Loss from discontinued operations		(25,922	)		(4,533	)		(31,897	)		(5,386	)
Income before cumulative effect of change in             accounting principle		39,446			72,797			201,152			218,293
Cumulative effect of change in accounting principle, net of     tax*		—			—			(32,369	)		(7,159	)
Net income	$	39,446		$	72,797		$	168,783		$	211,134
Income before cumulative effect, as adjusted*	$	39,446		$	81,549		$	201,152		$	242,795
Net income, as adjusted*	$	39,446		$	81,549		$	168,783		$	235,636
Weighted average shares outstanding during the period:
Basic shares		91,499			92,306			91,775			90,921
Diluted shares		92,017			93,509			92,424			92,042
Net income per common share*:
Basic:
Income from continuing operations	$	0.71		$	0.84		$	2.54		$	2.46
Loss from discontinued operations		(0.28	)		(0.05	)		(0.35	)		(0.06	)
Income before cumulative effect of change in          accounting principle		0.43			0.79			2.19			2.40
Cumulative effect of change in accounting principle		—			—			(0.35	)		(0.08	)
Net income	$	0.43		$	0.79		$	1.84		$	2.32
Income before cumulative effect, as adjusted	$	0.43		$	0.88		$	2.19		$	2.67
Net income, as adjusted	$	0.43		$	0.88		$	1.84		$	2.59
Diluted:
Income from continuing operations	$	0.71		$	0.83		$	2.52		$	2.43
Loss from discontinued operations		(0.28	)		(0.05	)		(0.34	)		(0.06	)
Income before cumulative effect of change in          accounting principle		0.43			0.78			2.18			2.37
Cumulative effect of change in accounting principle		—			—			(0.35	)		(0.08	)
Net income	$	0.43		$	0.78		$	1.83		$	2.29
Income before cumulative effect, as adjusted	$	0.43		$	0.87		$	2.18		$	2.64
Net income, as adjusted	$	0.43		$	0.87		$	1.83		$	2.56

* See Notes 2 and 3 of the Notes to Consolidated Financial Statements. For the nine months ended September 30, 2001, the cumulative effect adjustment relates to the adoption of FASB Statement No. 133, net of income tax benefit of $4,521.

5

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
       AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)

	Nine Months Ended September 30, 2002
				Accumulated Other Comprehensive Income (Loss)
(In thousands)	Common Stock			Net Unrealized Gains (Losses) on Investments and Retained Interests			Net Unrealized Gains (Losses) on Derivative Instruments			Subtotal			Retained Earnings			Total Shareholders’ Equity
Balance, January 1, 2002	$	1,111,214		$	31,774		$	28,177		$	59,951		$	1,109,704		$	2,280,869
Comprehensive income:
Net income for the period														168,783			168,783
Other comprehensive income:
Net realized and unrealized holding gains during the period, net              of income tax expense of $22,355					36,089						36,089
Reclassification for net realized gains recorded in operations, net             of income tax expense of $1,306					(2,109	)					(2,109	)
Net unrealized losses on derivative instruments, net of            reclassification to operations of $27,907           and income tax benefit of $5,309								(8,570	)		(8,570	)
Other comprehensive income (loss)					33,980			(8,570	)		25,410						25,410
Total comprehensive income																	194,193
Cash dividends—common, $.60 per share														(55,050	)		(55,050	)
Stock redeemed and retired		(83,452	)														(83,452	)
Stock options exercised, net of shares tendered and retired		21,041															21,041
Balance, September 30, 2002	$	1,048,803		$	65,754		$	19,607		$	85,361		$	1,223,437		$	2,357,601

	Nine Months Ended September 30, 2001
				Accumulated Other Comprehensive Income (Loss)
(In thousands)	Common Stock			Net Unrealized Gains (Losses) on Investments and Retained Interests			Net Unrealized Gains on Derivative Instruments		Subtotal			Retained Earnings			Total Shareholders’ Equity
Balance, January 1, 2001	$	907,604		$	(3,644	)			$	(3,644	)	$	874,884		$	1,778,844
Comprehensive income:
Net income for the period													211,134			211,134
Other comprehensive income:
Net realized and unrealized holding gains during the period, net              of  income tax expense of $26,626					42,985					42,985
Reclassification for net realized gains recorded in operations, net             of income tax expense of $6,628					(10,702	)				(10,702	)
Net unrealized gains on derivative instruments, net of              reclassification to operations of $12,856              and income tax expense of $7,095							$	11,454		11,454
Cumulative effect of change in accounting principle, adoption of              FASB Statement No. 133, net of income tax expense of              $21,245					13,259			21,266		34,525
Other comprehensive income					45,542			32,720		78,262						78,262
Total comprehensive income																289,396
Cash dividends—common, $.60 per share													(55,446	)		(55,446	)
Issuance of common shares for acquisitions		206,633											25,699			232,362
Stock redeemed and retired		(28,987	)													(28,987	)
Stock options exercised, net of shares tendered and retired		18,998														18,998
Balance, September 30, 2001	$	1,104,278		$	41,898		$	32,720	$	74,618		$	1,056,271		$	2,235,167

Total comprehensive income for the three months ended September 30, 2002 and 2001 was $61,824 and $72,619, respectively.

6

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(In thousands)	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Cash flows from operating activities:
Net income	$	39,446		$	72,797		$	168,783		$	211,134
Adjustments to reconcile net income to net cash provided by        (used in) operating activities:
Cumulative effect of change in accounting principle, net             of tax		—			—			32,369			7,159
Impairment losses		32,668			—			32,668			—
Provision for loan losses		22,309			21,470			56,104			46,477
Depreciation of premises and equipment		14,485			14,422			44,612			41,231
Amortization		8,304			16,983			29,684			45,982
Accretion of unearned income and fees, net of related             costs		(4,738	)		12,160			(8,062	)		15,388
Loss to minority interest		(2,486	)		(3,251	)		(3,211	)		(6,638	)
Equity securities losses (gains), net		26,452			(10,267	)		25,268			(40,159	)
Fixed income securities losses (gains), net		(327	)		(158	)		(387	)		3,940
Proceeds from sales of trading account securities		60,199,468			56,246,594			181,104,898			148,299,208
Increase in trading account securities		(60,258,339	)		(56,364,996	)		(181,368,416	)		(148,395,873	)
Proceeds from loans held for sale		118,588			142,253			377,036			399,103
Increase in loans held for sale		(203,275	)		(195,614	)		(329,139	)		(478,642	)
Net gains on sales of loans, leases and other assets		(12,857	)		(16,913	)		(25,592	)		(45,815	)
Change in accrued income taxes		34,631			24,801			40,448			113,335
Change in accrued interest receivable		20,466			(5,978	)		36,197			10,821
Change in other assets		(22,573	)		129,756			(164,717	)		(120,186	)
Change in other liabilities		176,131			190,361			187,327			248,607
Change in accrued interest payable		(38,466	)		10,188			(34,443	)		(2,004	)
Other, net		4,140			10,377			4,964			28,923
Net cash provided by operating activities		154,027			294,985			206,391			381,991
Cash flows from investing activities:
Net increase in money market investments		(879,465	)		(253,065	)		(916,241	)		(25,850	)
Proceeds from maturities of investment securities held to        maturity		206			560			1,415			1,806
Purchases of investment securities held to maturity		—			(3,331	)		(29,400	)		(3,331	)
Proceeds from sales of investment securities available for sale		1,555,742			1,840,385			8,525,290			3,432,905
Proceeds from maturities of investment securities available for        sale		577,946			600,849			1,550,126			2,713,235
Purchases of investment securities available for sale		(1,873,405	)		(2,688,066	)		(9,705,997	)		(5,120,050	)
Proceeds from sales of loans and leases		755,061			524,130			1,229,983			1,007,781
Net increase in loans and leases		(545,293	)		(782,593	)		(2,337,512	)		(2,202,587	)
Payments on leveraged leases		(3,575	)		—			(9,160	)		(4,870	)
Principal collections on leveraged leases		3,575			—			9,160			4,870
Proceeds from sales of premises and equipment		1,039			6,568			6,379			8,750
Purchases of premises and equipment		(40,989	)		(23,762	)		(74,600	)		(72,082	)
Proceeds from sales of other assets		4,716			5,016			17,430			13,242
Cash received for acquisitions, net of cash paid		—			(47,957	)		—			216,082
Cash paid for net liabilities on branches sold, net of cash        received		—			—			(68,352	)		—
Net cash used in investing activities		(444,442	)		(821,266	)		(1,801,479	)		(30,099	)

7

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Cash flows from financing activities:
Net increase in deposits	$	692,603		$	264,366		$	1,722,181		$	654,315
Net change in short-term funds borrowed		(640,887	)		274,997			(223,962	)		(1,217,390	)
Proceeds from FHLB advances over one year		1,500			—			3,000			100,000
Payments on FHLB advances over one year		(895	)		(567	)		(2,323	)		(22,636	)
Proceeds from issuance of long-term debt		285,000			—			285,000			201,914
Payments on long-term debt		(4,474	)		(36,202	)		(22,116	)		(68,842	)
Cash paid to reaquire minority interest		—			—			—			(66,044	)
Proceeds from issuance of common stock		3,527			2,762			18,648			14,437
Payments to redeem common stock		(26,991	)		(28,987	)		(83,452	)		(28,987	)
Dividends paid		(18,299	)		(18,461	)		(55,050	)		(55,446	)
Net cash provided by (used in) financing activities		291,084			457,908			1,641,926			(488,679	)
Net increase (decrease) in cash and due from banks		669			(68,373	)		46,838			(136,787	)
Cash and due from banks at beginning of period		1,024,778			978,838			978,609			1,047,252
Cash and due from banks at end of period	$	1,025,447		$	910,465		$	1,025,447		$	910,465
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	103,532		$	143,765		$	316,841		$	516,195
Income taxes		7,790			6,492			89,750			32,166
Loans transferred to other real estate owned		3,648			9,757			20,192			18,043

8

ZIONS BANCORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

September 30, 2002

1.      BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Certain prior period amounts have been reclassified to conform to the current financial statement presentation.

Operating results for the three- and nine-month periods ended September 30, 2002 are not necessarily indicative of the results that may be expected for the year ended December 31, 2002. The balance sheet at December 31, 2001 is from the audited financial statements at that date, but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2001.

2.      BUSINESS COMBINATIONS, GOODWILL, AND OTHER INTANGIBLE ASSETS

Financial Accounting Standards Board (“FASB”) Statement No. 141, Business Combinations, became effective for the Company for business combinations completed after June 30, 2001. FASB Statement No. 141 supersedes certain previous accounting guidance on business combinations, and eliminates the pooling-of-interest method of accounting. There were no acquisitions completed during the nine months ended September 30, 2002.

FASB Statement No. 142, Goodwill and Other Intangible Assets, became effective for the Company beginning January 1, 2002. Under this Statement, goodwill and intangible assets deemed to have indefinite lives are no longer amortized, but are subject to specified annual impairment tests. Other intangible assets are amortized over their useful lives.

9

ZIONS BANCORPORATION AND SUBSIDIARIES

Transitional disclosures under Statement No. 142 to reconcile prior period amounts of income before cumulative effect and net income to their respective adjusted amounts for the add back of goodwill amortization are as follows (in thousands, except per share amounts):

					Earnings per Share
					Basic				Diluted
	Three Months Ended September 30,				Three Months Ended September 30,
	2002		2001		2002		2001		2002		2001
Income before cumulative effect of change in     accounting principle	$	39,446	$	72,797	$	0.43	$	0.79	$	0.43	$	0.78
Add back of goodwill amortization net of income tax     benefit				8,752				0.09				0.09
Income before cumulative effect, as adjusted	$	39,446	$	81,549	$	0.43	$	0.88	$	0.43	$	0.87
Net income	$	39,446	$	72,797	$	0.43	$	0.79	$	0.43	$	0.78
Add back of goodwill amortization net of income tax     benefit				8,752				0.09				0.09
Net income, as adjusted	$	39,446	$	81,549	$	0.43	$	0.88	$	0.43	$	0.87

					Earnings per Share
					Basic				Diluted
	Nine Months Ended September 30,				Nine Months Ended September 30,
	2002		2001		2002		2001		2002		2001
Income before cumulative effect of change in     accounting principle	$	201,152	$	218,293	$	2.19	$	2.40	$	2.18	$	2.37
Add back of goodwill amortization net of income tax     benefit				24,502				0.27				0.27
Income before cumulative effect, as adjusted	$	201,152	$	242,795	$	2.19	$	2.67	$	2.18	$	2.64
Net income	$	168,783	$	211,134	$	1.84	$	2.32	$	1.83	$	2.29
Add back of goodwill amortization net of income tax     benefit				24,502				0.27				0.27
Net income, as adjusted	$	168,783	$	235,636	$	1.84	$	2.59	$	1.83	$	2.56

Changes in the carrying amount of goodwill for the three months ended September 30, 2002 by operating segment are as follows (in thousands):

	Zions First National Bank and Subsidiaries		California Bank & Trust		Nevada State Bank and Subsidiaries		National Bank of Arizona		Vectra Bank Colorado		The Commerce Bank of Washington		Other			Consolidated Company
Balance as of July 1, 2002	$	19,502	$	385,831	$	21,051	$	58,755	$	239,202	$	—	$	12,183		$	736,524
Impairment losses														(11,637	)		(11,637	)
Goodwill reclassified to discontinued     operations														(546	)		(546	)
Other adjustments, including contingent     consideration paid		12															12
Balance as of September 30, 2002	$	19,514	$	385,831	$	21,051	$	58,755	$	239,202	$	—	$	—		$	724,353

10

ZIONS BANCORPORATION AND SUBSIDIARIES

Changes in the carrying amount of goodwill for the nine months ended September 30, 2002 by operating segment are as follows (in thousands):

	Zions First National Bank and Subsidiaries			California Bank & Trust			Nevada State Bank and Subsidiaries		National Bank of Arizona		Vectra Bank Colorado			The Commerce Bank of Washington		Other			Consolidated Company
Balance as of January 1, 2002	$	11,533		$	387,387		$	21,051	$	57,168	$	239,232		$	—	$	54,392		$	770,763
Impairment losses																	(46,682	)		(46,682	)
Goodwill reclassified to    discontinued operations																	(546	)		(546)
Goodwill written off from sale of     branches					(1,082	)														(1,082	)
Goodwill pushdown from parent		7,989								1,142		16					(9,147	)		—
Other adjustments, including     contingent consideration paid		(8	)		(474	)				445		(46	)				1,983			1,900
Balance as of September 30, 2002	$	19,514		$	385,831		$	21,051	$	58,755	$	239,202		$	—	$	—		$	724,353

At the close of the second quarter, the Company completed all goodwill impairment testing required under the transitional provisions of Statement No. 142. During the second quarter, impairment losses of $32.4 million (net of income tax benefit of $2.7 million) were recognized as of January 1, 2002 as a cumulative effect of a change in accounting principle in accordance with Statement No. 142. This adjustment relates to the impairment in carrying value of the Company’s investments in certain e-commerce subsidiaries included in the “Other” operating segment. The impairment amount was determined by comparing the carrying value of these subsidiaries to their fair value at January 1, 2002, which was estimated from comparable market values including price-to-revenue multiples. During the third quarter, additional impairment losses were recognized as discussed in Note 3.

3.      DISCONTINUED OPERATIONS, IMPAIRMENT LOSSES, AND RESTRUCTURING CHARGES

During the three months ended September 30, 2002, the Company decided to discontinue the operations of the e-commerce subsidiaries discussed in Note 2. The Company determined that its plan to restructure and offer all or part of these subsidiaries for sale met the held for sale and discontinued operations criteria of FASB Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. Statement No. 144 became effective for the Company beginning January 1, 2002.

Statement No. 144 supersedes Statement No. 121 and provides a single accounting model for long-lived assets to be disposed of. Although retaining many of the fundamental recognition and measurement provisions of Statement No. 121, the new rules significantly change the criteria that would have to be met to classify an asset as held for sale. Statement No. 144 also supersedes the provisions of Accounting Principle Board (APB) Opinion No. 30 with regard to reporting the effects of a disposal of a segment of a business and requires expected future operating losses from discontinued operations to be displayed in discontinued operations in the period(s) in which the losses are incurred (rather than as of the measurement date as presently required by APB Opinion No. 30). In addition, more dispositions will qualify for discontinued operations treatment in the statement of income. The adoption of Statement No. 144 was material to the Company's financial condition and results of operations.

Summarized information for the loss from operations of discontinued subsidiaries is as follows (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2002			2001			2002			2001
Revenues	$	1,601		$	2,495		$	5,981		$	4,065
Expenses		6,800			8,852			21,106			10,968
Pretax loss from operations of discontinued subsidiaries	$	(5,199	)	$	(6,357	)	$	(15,125	)	$	(6,903	)

11

ZIONS BANCORPORATION AND SUBSIDIARIES

Additional pretax impairment losses of $28.7 million for these subsidiaries were recorded in the third quarter and are included as a separate line item with discontinued operations. The amounts of these impairment losses were determined by comparing the carrying amounts of these subsidiaries to their fair values, less costs to sell. Fair values were determined based on amounts offered in sales negotiations and market comparables. Expenses from discontinued operations for the three months ended September 30, 2002 include severance costs of $1.2 million related to the discontinued operations.

Asset and liabilities of discontinued operations included in other assets and accrued liabilities in the consolidated balance sheet as of September 30, 2002 are summarized as follows (in thousands):

Assets
Cash and due from banks	$	1,087
Interest-bearing deposits		577
Premises and equipment, net		793
Goodwill		546
Core deposit and other intangibles		891
Other assets		1,971
Total assets		5,865
Liabilities
Income tax payable		304
Other liabilities		4,086
Total liabilities		4,390

The Company also recorded impairment losses of $4.0 million during the third quarter on certain software, including software of other continuing e-commerce activities. Of this amount, $2.8 million is included in the “Zions First National Bank” operating segment and $1.2 million in the “Other” operating segment. The impairment losses were determined by comparing the carrying value to fair value, estimated by using discounted cash flow approaches. The loss amounts are separately reflected in the statement of income.

In addition, the Company recorded restructuring charges during the third quarter of $2.7 million related primarily to branch closings and restructuring of trust operations and administrative functions. The charges are separately reflected in the statement of income and include severance of $1.3 million and occupancy related costs of $1.4 million.

4.      OTHER RECENT ACCOUNTING PRONOUNCEMENTS

In April 2002, the FASB issued Statement No. 145, Recission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13 and Technical Corrections. Neither the currently or prospectively effective provisions of Statement No. 145 are material to the Company's financial condition or results of operations.

In July 2002, the FASB issued Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. Statement No. 146 requires companies to recognize costs associated with the exit or disposal of activities as they are incurred rather than at the date a plan of disposal or commitment to exit is initiated. Types of costs covered by Statement No. 146 include lease termination costs and certain employee severance costs that are associated with a restructuring, discontinued operation, facility closing, or other exit or disposal activity. Statement No. 146 will apply to all exit or disposal activities initiated after December 31, 2002. At this time, the Company does not expect the adoption of the provisions of Statement No. 146 to have a material impact on its financial results.

In October 2002, the FASB issued Statement No. 147, Acquisition of Certain Financial Institutions. Statement No. 147 amends the previous accounting guidance which required certain acquisitions of financial institutions where the fair market value of liabilities assumed was greater than the fair value of the tangible assets and identifiable intangible assets acquired to recognize and account for the excess as an unidentifiable intangible asset. Under the former guidance, this unidentifiable intangible asset was to be amortized over a period no greater than the life of the long-term interest bearing assets acquired. Under Statement No. 147, this excess, if acquired in a business combination, represents goodwill that should be accounted for in accordance with Statement No. 142. In addition, Statement No. 147 amends Statement No. 144 to include in its scope long-term customer-relationship assets of financial institutions such as depositor- and borrower-relationship intangibles assets and credit cardholder intangible assets. Consequently, those intangible assets are subject to the same undiscounted cash flow recoverability test and impairment loss recognition and measurement provisions that Statement No. 144 requires. The provisions of Statement No. 147 were effective October 1, 2002. The Company does not expect the adoption of the provisions of Statement No. 147 to have a material impact on its financial results.

5.      DEBT FINANCING

On August 21, 2002, the Company issued $285 million of 8.00% Capital Securities issued by a newly formed subsidiary of the Company, Zions Capital Trust B (the “Trust”). The Capital Securities represent undivided beneficial ownership interests in the assets of the Trust (consisting of junior subordinated debentures issued by the Company). Holders of the Capital Securities are entitled to receive cumulative cash distributions at an annual rate of 8.00%. The cash distributions, which are payable quarterly in arrears beginning December 1, 2002, match the timing and amount of the Company’s interest obligations on the junior subordinated debentures. The Company has unconditionally guaranteed the payment of all amounts due on the Capital Securities to the extent the Trust has funds available for the payment of such amounts. The Company can, on one or more occasions, defer the quarterly interest payments on the junior subordinated debentures for up to five years. This would also have the effect of deferring payments on the Capital Securities. The Capital Securities are scheduled to be redeemed on September 1, 2032 and can be redeemed in whole or in part on or after September 1, 2007 or upon certain changes in tax laws and regulations or in the treatment of the Capital Securities for bank regulatory purposes. The Capital Securities, junior subordinated debentures and the guarantee were registered with the Securities and Exchange Commission in August 2002.

12

ZIONS BANCORPORATION AND SUBSIDIARIES

During the third quarter of 2002, the Company also filed a prospectus supplement with the Securities and Exchange Commission for the issuance of up to $340 million of Senior Medium-Term Notes, Series A, and Subordinated Medium-Term Notes, Series B. The Company may issue such debt from time to time with the terms of each note issuance to be specified in a pricing supplement filed with the Securities and Exchange Commission. Interest may be at a fixed or floating rate. As of September 30, 2002, the Company had not issued any of such debt.

6.      OPERATING SEGMENT INFORMATION

The Company manages its operations and prepares management reports with a primary focus on geographical area. All segments presented, except for the segment defined as “Other,” are based on commercial banking operations. Zions First National Bank and subsidiaries operate 127 branches in Utah and 23 in Idaho. California Bank & Trust operates 92 branches in Northern and Southern California. Nevada State Bank and subsidiaries operate 61 offices in Nevada. National Bank of Arizona operates 47 branches in Arizona. Vectra Bank Colorado operates 57 branches in Colorado and one branch in New Mexico. The Commerce Bank of Washington operates one branch in the state of Washington. The operating segment defined as “Other” includes the parent company, certain e-commerce subsidiaries, other smaller nonbank operating units, and eliminations of transactions between segments.

The accounting policies of the individual segments are the same as those of the Company. The Company allocates centrally provided services to the business segments based upon estimated usage of those services. Commencing January 1, 2002, the Company began transfer pricing on a consolidated company level for all banking subsidiaries except California Bank & Trust. Allocated transfer pricing (expense) income included in net interest income of the banking subsidiaries for the three- and nine-month periods ended September 30, 2002, respectively, are as follows: Zions First National Bank – $(14.8) and $(39.5) million, Nevada State Bank – $2.7 and 8.9 million, National Bank of Arizona – $3.6 and $8.7 million, Vectra Bank Colorado – $6.7 and $17.9 million, and The Commerce Bank of Washington – $1.8 and $4.0 million. Also, for consistency between periods, net income of each segment for the three- and nine-month periods ended September 30, 2001 has been adjusted for the add back of goodwill amortization following the adoption of FASB Statement No. 142 in 2002.

13

ZIONS BANCORPORATION AND SUBSIDIARIES

The following table presents selected operating segment information for the three months ended September 30, 2002 and 2001:

(In millions)	Zions First National Bank and Subsidiaries						California Bank & Trust				Nevada State Bank and Subsidiaries				National Bank of Arizona
	2002			2001			2002		2001		2002		2001		2002		2001
CONDENSED INCOME STATEMENT
Net interest income	$	72.5		$	81.6		$	94.0	$	90.3	$	31.9	$	28.6	$	30.0	$	26.1
Provision for loan losses		12.0			15.2			6.5		0.7		1.0		2.6		0.1		0.2
Noninterest income		31.1			59.6			19.3		23.7		6.8		6.0		4.0		4.0
Merger, restructuring, impairment expenses and     amortization of goodwill, core deposit and     other intangibles		3.5			0.5			1.9		9.1		0.2		0.4		1.8		1.2
Other noninterest expense		76.3			71.2			56.8		59.0		20.6		19.2		16.5		15.3
Income tax expense (benefit)		3.3			19.4			19.2		20.2		5.8		4.2		6.2		5.3
Minority interest		(0.9	)		(1.3	)		—		—		—		—		—		—
Loss from discontinued operations		—			—			—		—		—		—		—		—
Cumulative effect adjustment		—			—			—		—		—		—		—		—
Add back of goodwill amortization		—			0.3			—		4.3		—		0.2		—		0.4
Net income (loss), as adjusted	$	9.4		$	36.5		$	28.9	$	29.3	$	11.1	$	8.4	$	9.4	$	8.5
AVERAGE BALANCE SHEET DATA
Total assets	$	10,554		$	9,659		$	8,670	$	8,428	$	2,598	$	2,391	$	2,681	$	2,567
Net loans and leases		6,768			6,009			5,846		5,473		1,712		1,392		1,821		1,749
Total deposits		6,376			4,991			6,886		6,819		2,263		2,031		2,280		2,145

(In millions)	Vectra Bank Colorado				The Commerce Bank of Washington				Other						Consolidated Company
	2002		2001		2002		2001		2002			2001			2002			2001
CONDENSED INCOME STATEMENT
Net interest income	$	29.1	$	21.5	$	7.1	$	5.4	$	(3.3	)	$	(6.4	)	$	261.3		$	247.1
Provision for loan losses		1.3		2.6		0.6		0.2		0.8			—			22.3			21.5
Noninterest income		9.0		7.0		0.4		0.1		4.2			5.6			74.8			106.0
Merger, restructuring, impairment expenses and     amortization of goodwill, core deposit and     other intangibles		1.4		3.3		—		—		1.3			0.3			10.1			14.8
Other noninterest expense		24.1		19.9		2.6		2.2		12.2			12.9			209.1			199.7
Income tax expense (benefit)		4.1		1.8		1.5		1.0		(8.3	)		(8.9	)		31.8			43.0
Minority interest		—		—		—		—		(1.6	)		(1.9	)		(2.5	)		(3.2	)
Loss from discontinued operations		—		—		—		—		(25.9	)		(4.5	)		(25.9	)		(4.5	)
Cumulative effect adjustment		—		—		—		—		—			—			—			—
Add back of goodwill amortization		—		2.7		—		—		—			0.8			—			8.7
Net income (loss), as adjusted	$	7.2	$	3.6	$	2.8	$	2.1	$	(29.4	)	$	(6.9	)	$	39.4		$	81.5
AVERAGE BALANCE SHEET DATA
Total assets	$	2,649	$	2,258	$	557	$	486	$	(1,280	)	$	(1,271	)	$	26,429		$	24,518
Net loans and leases		1,857		1,577		320		268		119			77			18,443			16,545
Total deposits		1,790		1,412		401		353		(1,145	)		(568	)		18,851			17,183

14

ZIONS BANCORPORATION AND SUBISDIARIES

The following table presents selected operating segment information for the nine months ended September 30, 2002 and 2001:

(In millions)	Zions First National Bank and Subsidiaries						California Bank & Trust					Nevada State Bank and Subsidiaries					National Bank of Arizona
	2002			2001			2002		2001			2002		2001			2002		2001
CONDENSED INCOME STATEMENT
Net interest income	$	219.1		$	220.5		$	282.7	$	248.5		$	94.8	$	85.2		$	87.0	$	76.3
Provision for loan losses		31.3			26.9			15.0		2.2			3.2		7.6			1.1		1.1
Noninterest income		138.4			177.1			59.9		73.4			20.9		17.8			14.1		11.8
Merger, restructuring, impairment expenses and     amortization of goodwill, core deposit and     other intangibles		4.1			3.1			5.7		20.8			0.4		1.1			2.6		2.6
Other noninterest expense		226.2			209.0			171.1		169.6			61.5		58.9			49.0		45.5
Income tax expense (benefit)		31.4			54.4			60.9		56.8			17.2		12.0			19.2		15.5
Minority interest		(1.1	)		(2.0	)		—		—			—		—			—		—
Loss from discontinued operations		—			—			—		—			—		—			—		—
Cumulative effect adjustment		—			(5.3	)		—		(1.3	)		—		(0.6	)		—		—
Add back of goodwill amortization		—			0.6			—		11.6			—		0.7			—		1.1
Net income (loss), as adjusted	$	65.6		$	101.5		$	89.9	$	82.8		$	33.4	$	23.5		$	29.2	$	24.5
AVERAGE BALANCE SHEET DATA
Total assets	$	10,288		$	9,145		$	8,548	$	7,744		$	2,551	$	2,367		$	2,634	$	2,343
Net loans and leases		6,561			5,537			5,771		5,285			1,631		1,380			1,817		1,669
Total deposits		5,896			4,535			6,778		6,373			2,212		2,027			2,225		1,965

(In millions)	Vectra Bank Colorado				The Commerce Bank of Washington				Other						Consolidated Company
	2002		2001		2002		2001		2002			2001			2002			2001
CONDENSED INCOME STATEMENT
Net interest income	$	85.2	$	64.4	$	18.8	$	16.5	$	(11.0	)	$	(13.4	)	$	776.6		$	698.0
Provision for loan losses		3.7		7.8		1.0		1.0		0.8			(0.1	)		56.1			46.5
Noninterest income		24.2		19.1		1.3		0.9		11.4			10.3			270.2			310.4
Merger, restructuring, impairment expenses and     amortization of goodwill, core deposit and     other intangibles		2.6		9.7		—		—		1.3			1.4			16.7			38.7
Other noninterest expense		73.0		58.7		7.8		7.2		34.8			34.4			623.4			583.3
Income tax expense (benefit)		10.7		5.0		4.0		3.1		(22.7	)		(24.0	)		120.7			122.8
Minority interest		—		—		—		—		(2.1	)		(4.6	)		(3.2	)		(6.6	)
Loss from discontinued operations		—		—		—		—		(31.9	)		(5.4	)		(31.9	)		(5.4	)
Cumulative effect adjustment		—		—		—		—		(32.4	)		—			(32.4	)		(7.2	)
Add back of goodwill amortization		—		7.9		—		—		—			2.6			—			24.5
Net income (loss), as adjusted	$	19.4	$	10.2	$	7.3	$	6.1	$	(76.0	)	$	(13.0	)	$	168.8		$	235.6
AVERAGE BALANCE SHEET DATA
Total assets	$	2,606	$	2,228	$	543	$	508	$	(1,088	)	$	(876	)	$	26,082		$	23,459
Net loans and leases		1,837		1,533		306		254		102			69			18,025			15,727
Total deposits		1,743		1,406		387		363		(989	)		(242	)		18,252			16,427

15

ZIONS BANCORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS

FINANCIAL HIGHLIGHTS
(Unaudited)

(In thousands, except per share and ratio data)	Three Months Ended September 30,									Nine Months Ended September 30,
	2002			2001			% Change			2002			2001			% Change
										(Adjusted)(3)
EARNINGS (4)
Taxable-equivalent net interest income	$	266,660		$	252,214			5.73	%	$	792,247		$	713,074			11.10	%
Net interest income		261,306			247,118			5.74	%		776,560			697,969			11.26	%
Noninterest income		74,815			106,044			(29.45	)%		270,246			310,412			(12.94	)%
Provision for loan losses		22,309			21,470			3.91	%		56,104			46,477			20.71	%
Noninterest expense		219,158			214,582			2.13	%		640,120			622,047			2.91	%
Income before income taxes and minority interest		94,654			117,110			(19.18	)%		350,582			339,857			3.16	%
Income taxes		31,772			43,031			(26.16	)%		120,744			122,816			(1.69	)%
Minority interest		(2,486	)		(3,251	)		(23.53	)%		(3,211	)		(6,638	)		(51.63	)%
Income from continuing operations		65,368			77,330			(15.47	)%		233,049			223,679			4.19	%
Loss from discontinued operations		(25,922	)		(4,533	)		471.85	%		(31,897	)		(5,386	)		492.22	%
Cumulative effect adjustments		—			—						(32,369	)		(7,159	)		352.14	%
Net income		39,446			72,797			(45.81	)%		168,783			211,134			(20.06	)%
Income before cumulative effect, as adjusted (1)		39,446			81,549			(51.63	)%		201,152			242,795			(17.15	)%
Net income, as adjusted (1)		39,446			81,549			(51.63	)%		168,783			235,636			(28.37	)%
PER COMMON SHARE (4)
Net income (diluted)		0.43			0.78			(44.87	)%		1.83			2.29			(20.09	)%
Income from continuing operations (diluted), as     adjusted (1)		0.71			0.92			(22.83	)%		2.52			2.70			(6.67	)%
Loss from discontinued operations (diluted)		(0.28	)		(0.05	)		460.00	%		(0.34	)		(0.06	)		466.67	%
Income before cumulative effect (diluted), as     adjusted (1)		0.43			0.87			(50.57	)%		2.18			2.64			(17.42	)%
Net income (diluted), as adjusted (1)		0.43			0.87			(50.57	)%		1.83			2.56			(28.52	)%
Dividends		0.20			0.20						0.60			0.60
Book value											25.86			24.29			6.46	%
SELECTED RATIOS (1)
Return on average assets		0.59	%		1.32	%					0.87	%		1.34	%
Return on average common equity		6.51	%		14.51	%					9.68	%		15.07	%
Efficiency ratio		74.23	%		59.43	%					64.57	%		59.16	%
Net interest margin		4.53	%		4.65	%					4.61	%		4.63	%
OPERATING CASH EARNINGS (2)
Taxable-equivalent net interest income	$	266,660		$	252,214			5.73	%	$	792,247		$	713,074			11.10	%
Net interest income		261,306			247,113			5.74	%		776,560			697,968			11.26	%
Noninterest income		86,724			108,544			(20.10	)%		287,617			314,478			(8.54	)%
Provision for loan losses		22,309			21,470			3.91	%		56,104			46,477			20.71	%
Noninterest expense		213,496			205,372			3.96	%		639,619			589,818			8.44	%
Income before income taxes and minority interest		112,225			128,815			(12.88	)%		368,454			376,151			(2.05	)%
Income taxes		38,561			44,750			(13.83	)%		127,285			128,652			(1.06	)%
Minority interest		(2,486	)		(3,251	)		(23.53	)%		(3,211	)		(6,438	)		(50.12	)%
Income before cumulative effect adjustments		76,150			87,316			(12.79	)%		244,380			253,937			(3.76	)%
PER COMMON SHARE
Net income (diluted)		0.83			0.93			(10.75	)%		2.64			2.76			(4.35	)%
Dividends		0.20			0.20						0.60			0.60
Book value											17.02			14.95			13.85	%
SELECTED RATIOS
Return on average assets		1.18	%		1.46	%					1.29	%		1.50	%
Return on average common equity		19.69	%		25.48	%					22.06	%		25.71	%
Efficiency ratio		60.41	%		56.93	%					59.23	%		57.40	%
Net interest margin		4.53	%		4.65	%					4.61	%		4.63	%

(1)	Adjusted according to FASB Statement No. 142 for the add back of goodwill amortization, net of income tax benefit.
(2)	Before amortization of goodwill in the prior period, amortization of core deposit and other intangible assets, merger related expense, restructuring charges, impairment losses, goodwill allocated to the carrying value of branches sold in 2002, and the cumulative effect of the adoption of FASB Statements No. 133 and 142.
(3)	Adjusted according to FASB Statement No. 142 for the impairment to goodwill and reflected as a cumulative effect adjustment, net of income tax benefit.
(4)	Adjusted according to FASB Statement No. 144 for discontinued operations, net of income tax benefit.

16

ZIONS BANCORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS (Continued)
(Unaudited)

(In thousands, except share and ratio data)	Three Months Ended September 30,									Nine Months Ended September 30,
	2002			2001			% Change			2002			2001			% Change
AVERAGE BALANCES
Total assets	$	26,429,054		$	24,518,033			7.79	%	$	26,081,737		$	23,459,391			11.18	%
Securities		3,788,158			4,004,646			(5.41	)%		3,922,040			3,927,668			(0.14	)%
Net loans and leases		18,442,768			16,545,117			11.47	%		18,024,954			15,726,967			14.61	%
Goodwill		772,439			753,783			2.47	%		747,888			673,389			11.06	%
Core deposit and other intangibles		98,032			116,178			(15.62	)%		102,559			96,726			6.03	%
Total deposits		18,851,300			17,182,559			9.71	%		18,252,378			16,426,779			11.11	%
Minority interest		22,234			20,688			7.47	%		20,725			34,278			(39.54	)%
Shareholders’ equity		2,404,871			2,229,326			7.87	%		2,331,357			2,090,680			11.51	%
Weighted average common and common-     equivalent shares outstanding		92,017,388			93,509,495			(1.60	)%		92,423,909			92,042,138			0.41	%
AT PERIOD END
Total assets											26,289,314			24,255,570			8.38	%
Securities											3,426,574			3,680,612			(6.90	)%
Net loans and leases											18,321,351			16,776,620			9.21	%
Sold loans being serviced (1)											3,012,780			2,256,379			33.52	%
Allowance for loan losses											265,406			245,862			7.95	%
Goodwill											724,353			744,033			(2.65	)%
Core deposit and other intangibles											82,146			115,666			(28.98	)%
Total deposits											19,481,032			17,434,450			11.74	%
Minority interest											23,028			13,614			69.15	%
Shareholders’ equity											2,357,601			2,235,167			5.48	%
Common shares outstanding											91,154,578			92,001,233			(0.92	)%
Average equity to average assets		9.10	%		9.09	%					8.94	%		8.91	%
Common dividend payout		46.39	%		25.36	%					32.62	%		26.26	%
Nonperforming assets											131,969			108,602			21.52	%
Loans past due 90 days or more											35,443			46,780			(24.23	)%
Nonperforming assets to net loans and leases, other   real estate owned and other nonperforming     assets at period end											0.72	%		0.65	%

(1) Amount represents the outstanding balance of loans sold and being serviced by the Company, excluding conforming first mortgage residential real estate loans.

17

ZIONS BANCORPORATION AND SUBSIDIARIES

OPERATING RESULTS

Zions Bancorporation and subsidiaries (“the Company”) achieved net income of $39.4 million, or $0.43 per diluted share for the third quarter of 2002, a decrease of 45.8% and 44.9%, respectively, from the $72.8 million, or $0.78 per diluted share in the third quarter of 2001. Net income for the third quarter of 2001, adjusted for the add back of goodwill amortization under Financial Accounting Standards Board (“FASB”) Statement No. 142, was $81.5 million, or $0.87 per diluted share. Comparing the equivalent amount in the third quarter of 2002 to this adjusted amount in 2001 reflects a decrease of 51.6% in net income and a 50.6% decrease per diluted share. All references hereinafter to prior periods are on an “as adjusted” basis for the add back of goodwill amortization under FASB Statement No. 142.

The decrease in earnings includes the effects of the Company’s decision to discontinue the operations of certain e-commerce subsidiaries during the third quarter of 2002. Also included are impairment losses on other long-lived assets and restructuring charges related to branch closings and trust and administrative operations. These charges are described in Note 3 of the Notes to Consolidated Financial Statements. In addition, the Company recorded impairment charges to its minority interest investment in an investment banking firm and write-downs on certain venture capital investments. The following table summarizes, by income statement line affected, the impact of these adjustments and the loss from operations of discontinued subsidiaries:

(In thousands, except per share amounts)	Pretax Amount		After-tax Amount		Diluted EPS
Noninterest income:
Equity securities gains (losses), net        Write-downs of venture capital investments and a            minority interest in an investment banking firm	$	27,112	$	16,741	$	0.18
Noninterest expense:
Restructuring charges		2,691		1,621		0.02
Impairment losses on long-lived assets		3,977		2,455		0.03
		6,668		4,076		0.05
Discontinued operations:
Loss from operations of discontinued subsidiaries		5,199		3,111		0.03
Impairment losses, principally goodwill and identified intangibles		28,691		22,811		0.25
		33,890		25,922		0.28
Net impact	$	67,670	$	46,739	$	0.51

For the first nine months of 2002, net income was $168.8 million or $1.83 per diluted share, compared to $235.6 million or $2.56 per diluted share for the first nine months of 2001. In addition to the above discussion, the 2002 amounts include impairment losses of $32.4 million, net of an income tax benefit of $2.7 million, recognized during the second quarter of 2002 according to FASB Statement No. 142 and accounted for as a cumulative effect of a change in accounting principle. This adjustment relates to an impairment in carrying value as of January 1, 2002 of the Company’s investments in certain e-commerce subsidiaries. The 2001 amounts include a cumulative effect of a change in accounting principle for the adoption of FASB Statement No. 133 of $7.2 million.

Prior to the third quarter, the Company finalized the exchange of its interest in Digital Signature Trust (“DST”) for an approximate 33% ownership in Identrus, LLC. During the third quarter, the Company incurred a loss of $0.8 million (slightly less than $0.01 per diluted share) related to its investment in Identrus.

18

ZIONS BANCORPORATION AND SUBSIDIARIES

The annualized return on average assets was 0.59% in the third quarter of 2002, compared to 1.32% in the third quarter of 2001. The annualized return on average common shareholders’ equity was 6.51% in the third quarter of 2002, compared to 14.51% in the third quarter of 2001. The efficiency ratio, defined as the percentage of noninterest expenses to the sum of taxable equivalent net interest income and noninterest income, increased to 74.23% in the third quarter of 2002 from 59.43% in the third quarter of 2001. The changes reflect the adjustments to operations discussed previously.

For the first nine months of 2002, the annualized return on average assets was 0.87%, compared to 1.34% for the first nine months of 2001. The annualized return on average common shareholders’ equity was 9.68% for the first nine months of 2002, compared to 15.07% for the first nine months of 2001. The decreases reflect the adjustments to operations discussed previously.

The Company’s third quarter decrease in earnings of $42.1 million (51.6%), compared to the same period in the previous year, includes a $14.2 million (5.7%) increase in net interest income and a $11.3 million (26.2%) decrease in income taxes, offset by a $0.8 million (3.9%) increase in the provision for loan losses, a $31.2 million (29.4%) decrease in noninterest income, a $12.9 million (6.3%) increase in noninterest expense (after adjusting 2001 for the add back of goodwill amortization), a $0.8 million (23.5%) decrease from the effects of minority interests, and a $21.4 million (471.9%) increase in the loss from discontinued operations.

For the first nine months of 2002 compared to the same period in 2001, the $66.9 million (28.4%) decrease in net income reflects a $78.6 million (11.3%) increase in net interest income and a $2.1 million (1.7%) decrease in income taxes, offset by a $9.6 million (20.7%) increase in the provision for loan losses, a $40.2 million (12.9%) decrease in noninterest income, a $41.2 million (6.9%) increase in noninterest expense (after adjusting 2001 for the add back of goodwill amortization), a $3.4 million (51.6%) decrease from the effects of minority interests, a $26.5 million (492.2%) increase in the loss from discontinued operations, and a $25.2 million (352.1%) increase in the cumulative effect of a change in accounting principle resulting from the adoption in 2002 of FASB Statement No. 142 compared to the adoption in 2001 of FASB Statement No. 133.

Noninterest income for the first nine months of 2001 included a $50.2 million gain from the sale of a nonpublic investee of the Company to a public company, Concord EFS, Inc., offset by valuation adjustments to venture capital investments of $36.7 million. Noninterest expense included $14.4 million in nonrecurring charges for certain benefit obligations, consulting services, and closed business operations. Also during the same period in 2001, the Company completed several acquisitions accounted for as purchases. Results of operations between periods reflect these transactions.

OPERATING CASH EARNINGS RESULTS

Operating cash earnings are earnings before amortization of goodwill in the prior period, amortization of core deposit and other intangible assets, merger related expense, restructuring charges, impairment losses, goodwill allocated to the carrying value of branches sold in 2002, and the cumulative effect of adoption of FASB Statements No. 133 and 142. The above adjustments do not include the write-downs of venture capital investments for purposes of determining operating cash earnings.

Operating cash earnings for the third quarter of 2002 were $76.2 million or $0.83 per diluted share, a decrease of 12.8% and 10.8%, respectively, from the $87.3 million or $0.93 per diluted share earned in the third quarter of 2001. Operating cash earnings for the third quarter of 2002 decreased 10.2% from the $84.8 million earned during the second quarter of 2002. Operating cash earnings per diluted share

19

ZIONS BANCORPORATION AND SUBSIDIARIES

decreased 9.8% from the $0.92 earned in the second quarter of 2002. Year-to-date operating cash earnings were $244.4 million, a decrease of 3.8% from the $253.9 million earned in the first nine months of 2001. Year-to-date operating cash earnings per diluted share were $2.64, a decrease of 4.3% from the same period in 2001.

The operating cash annualized return on average assets for the third quarter and for the first nine months of 2002 was 1.18% and 1.29%, compared to 1.46% and 1.50%, respectively, in 2001. Operating cash annualized return on average common shareholders’ equity was 19.69% and 22.06% for the third quarter and for the first nine months of 2002, compared to 25.48% and 25.71% for the same periods in 2001. The Company’s cash efficiency ratio for the third quarter and for the first nine months of 2002 was 60.41% and 59.23%, respectively, compared to 56.93% and 57.40% for the same periods in 2001.

NET INTEREST INCOME AND INTEREST RATE SPREADS

Net interest income for the third quarter of 2002, adjusted to a fully taxable-equivalent basis, increased 5.7% to $266.7 million compared to $252.2 million for the third quarter of 2001, and increased 0.9% from $264.3 million for the second quarter of 2002. Net interest margin was 4.53% for the third quarter of 2002, compared to 4.65% for the third quarter of 2001 and 4.61% for the second quarter of 2002. The decreased margin resulted from a lowering and flattening yield curve during the quarter coupled with the Company’s slightly asset-sensitive position. Nine-month net interest income, on a fully taxable-equivalent basis, was $792.2 million in 2002, an increase of 11.1% compared to $713.1 million in 2001. Net interest margin for the first nine months of 2002 was 4.61% compared to 4.63% for the first nine months of 2001.

The yield on average earning assets decreased 118 basis points during the third quarter of 2002 compared to the third quarter of 2001, and 20 basis points from the second quarter of 2002. The average rate paid during the third quarter on interest-bearing funds decreased 125 basis points from the third quarter of 2001 and 12 basis points from the second quarter of 2002. Comparing the first nine months of 2002 with 2001, the yield on average earning assets decreased 149 basis points, while the cost of interest bearing funds decreased 175 basis points.

The spread on average interest-bearing funds for the third quarter of 2002 was 4.13%, up from 4.06% for the third quarter of 2001 and down from the 4.21% for the second quarter of 2002. The spread on average interest-bearing funds for the first nine months of 2002 was 4.22%, up from 3.96% for the first nine months of 2001.

20

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

	Three Months Ended September 30, 2002								Three Months Ended September 30, 2001
(In thousands)	Average Balance			Amount of Interest (1)		Average Rate			Average Balance			Amount of Interest (1)		Average Rate
ASSETS
Money market investments	$	1,105,924		$	4,502		1.62	%	$	951,542		$	8,400		3.50	%
Securities:
Held to maturity		—			—					51,934			744		5.68	%
Available for sale		3,137,559			42,155		5.33	%		3,303,907			49,788		5.98	%
Trading account		650,599			5,766		3.52	%		648,805			7,026		4.30	%
Total securities		3,788,158			47,921		5.02	%		4,004,646			57,558		5.70	%
Loans:
Loans held for sale		185,021			1,802		3.86	%		223,267			2,905		5.16	%
Net loans and leases (2)		18,257,747			317,743		6.90	%		16,321,850			337,476		8.20	%
Total loans		18,442,768			319,545		6.87	%		16,545,117			340,381		8.16	%
Total interest-earning assets		23,336,850			371,968		6.32	%		21,501,305			406,339		7.50	%
Cash and due from banks		897,370								844,534
Allowance for loan losses		(265,656	)							(235,062	)
Goodwill		772,439								753,783
Core deposit and other intangibles		98,032								116,178
Other assets		1,590,019								1,537,295
Total assets	$	26,429,054							$	24,518,033
LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits	$	2,629,700			7,140		1.08	%	$	2,121,213			8,022		1.50	%
Money market super NOW deposits		8,228,171			35,808		1.73	%		7,209,070			51,820		2.85	%
Time under $100,000		1,879,858			14,790		3.12	%		2,165,461			26,740		4.90	%
Time $100,000 and over		1,453,814			12,200		3.33	%		1,564,209			19,142		4.86	%
Foreign deposits		103,723			363		1.39	%		101,392			727		2.84	%
Total interest-bearing deposits		14,295,266			70,301		1.95	%		13,161,345			106,451		3.21	%
Borrowed funds:
Securities sold, not yet purchased		389,643			4,082		4.16	%		317,852			3,587		4.48	%
Federal funds purchased and security        repurchase agreements		2,166,959			8,461		1.55	%		2,770,058			22,898		3.28	%
Commercial paper		360,023			1,903		2.10	%		352,106			3,511		3.96	%
FHLB advances and other borrowings:
One year or less		751,162			3,701		1.95	%		320,339			3,270		4.05	%
Over one year		239,955			3,126		5.17	%		243,860			3,202		5.21	%
Long-term debt		895,611			13,734		6.08	%		611,215			11,206		7.27	%
Total borrowed funds		4,803,353			35,007		2.89	%		4,615,430			47,674		4.10	%
Total interest-bearing liabilities		19,098,619			105,308		2.19	%		17,776,775			154,125		3.44	%
Noninterest-bearing deposits		4,556,034								4,021,214
Other liabilities		347,296								470,030
Total liabilities		24,001,949								22,268,019
Minority interest		22,234								20,688
Total shareholders’ equity		2,404,871								2,229,326
Total liabilities and shareholders’ equity	$	26,429,054							$	24,518,033
Spread on average interest-bearing funds							4.13	%							4.06	%
Net interest income and net yield on interest-          earning assets				$	266,660		4.53	%				$	252,214		4.65	%

(1)	Taxable-equivalent rates used where applicable.
(2)	Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

21

ZIONS BANCORPORATION AND SUBSIDIARIES
CONSOLIDATED AVERAGE BALANCE SHEETS, YIELDS AND RATES
(Unaudited)

	Nine Months Ended September 30, 2002								Nine Months Ended September 30, 2001
(In thousands)	Average Balance			Amount of Interest (1)		Average Rate			Average Balance			Amount of Interest (1)		Average Rate
ASSETS
Money market investments	$	1,021,794		$	12,403		1.62	%	$	935,236		$	30,065		4.30	%
Securities:
Held to maturity		57,351			2,292		5.34	%		51,758			2,525		6.52	%
Available for sale		3,233,715			130,294		5.39	%		3,226,011			158,319		6.56	%
Trading account		630,974			16,679		3.53	%		649,899			25,221		5.19	%
Total securities		3,922,040			149,265		5.09	%		3,927,668			186,065		6.33	%
Loans:
Loans held for sale		191,563			6,729		4.70	%		203,235			9,147		6.02	%
Net loans and leases (2)		17,833,391			947,582		7.10	%		15,523,732			1,005,389		8.66	%
Total loans		18,024,954			954,311		7.08	%		15,726,967			1,014,536		8.62	%
Total interest-earning assets		22,968,788			1,115,979		6.50	%		20,589,871			1,230,666		7.99	%
Cash and due from banks		930,865								822,712
Allowance for loan losses		(265,465	)							(221,474	)
Goodwill		747,888								673,389
Core deposit and other intangibles		102,559								96,726
Other assets		1,597,102								1,498,167
Total assets	$	26,081,737							$	23,459,391
LIABILITIES
Interest-bearing deposits:
Savings and NOW deposits	$	2,504,196			20,177		1.08	%	$	2,001,993			25,393		1.70	%
Money market super NOW deposits		7,793,899			104,254		1.79	%		6,920,012			180,372		3.48	%
Time under $100,000		1,939,379			49,051		3.38	%		2,052,569			78,285		5.10	%
Time $100,000 and over		1,509,383			39,403		3.49	%		1,552,073			65,164		5.61	%
Foreign deposits		103,044			1,151		1.49	%		107,172			2,573		3.21	%
Total interest-bearing deposits		13,849,901			214,036		2.07	%		12,633,819			351,787		3.72	%
Borrowed funds:
Securities sold, not yet purchased		386,686			12,087		4.18	%		344,302			13,434		5.22	%
Federal funds purchased and security        repurchase agreements		2,646,221			32,227		1.63	%		2,684,572			82,835		4.13	%
Commercial paper		362,870			5,821		2.14	%		323,244			11,853		4.90	%
FHLB advances and other borrowings:
One year or less		648,690			9,267		1.91	%		474,405			19,909		5.61	%
Over one year		240,282			9,316		5.18	%		190,618			7,922		5.56	%
Long-term debt		815,816			40,978		6.72	%		523,681			29,852		7.62	%
Total borrowed funds		5,100,565			109,696		2.88	%		4,540,822			165,805		4.88	%
Total interest-bearing liabilities		18,950,466			323,732		2.28	%		17,174,641			517,592		4.03	%
Noninterest-bearing deposits		4,402,477								3,792,960
Other liabilities		376,712								366,832
Total liabilities		23,729,655								21,334,433
Minority interest		20,725								34,278
Total shareholders’ equity		2,331,357								2,090,680
Total liabilities and shareholders’ equity	$	26,081,737							$	23,459,391
Spread on average interest-bearing funds							4.22	%							3.96	%
Net interest income and net yield on interest-          earning assets				$	792,247		4.61	%				$	713,074		4.63	%

(1)	Taxable-equivalent rates used where applicable.
(2)	Net of unearned income and fees, net of related costs. Loans include nonaccrual and restructured loans.

22

ZIONS BANCORPORATION AND SUBSIDIARIES

PROVISION FOR LOAN LOSSES

The provision for loan losses was $22.3 million for the third quarter of 2002, compared to $15.7 million for the second quarter of 2002, and $21.5 million for the third quarter of 2001. The provision for loan losses for the first nine months of 2002 totaled $56.1 million, 20.7% more than the $46.5 million provision for the first nine months of 2001. Annualized, the year-to-date provision is 0.42% of average loans for 2002 compared to 0.39% for the first nine months of 2001. The increased provision for loan losses for the first nine months of 2002 compared to the same period in 2001 reflects management’s evaluation of its various portfolios, statistical trends, and various other economic factors.

NONINTEREST INCOME

Noninterest income for the third quarter of 2002 was $74.8 million, a decrease of 29.4% from the $106.0 million for the third quarter of 2001, and a decrease of 26.4% from the $101.6 million for the second quarter of 2002. The decrease for the third quarter of 2002 resulted primarily from the previously discussed charges during the quarter for write-downs of venture capital investments and a minority interest investment in an investment banking firm. Excluding equity securities gains (losses), noninterest income would have increased $5.5 million or 5.7%.

Comparing the segments of noninterest income for the third quarter of 2002 to the third quarter of 2001, service charges on deposit accounts increased 17.9%, loan sales and servicing income decreased 15.4%, other service charges, commissions and fees increased 9.5%, income from securities conduit increased 14.2%, market making, trading and nonhedge derivative income decreased 5.9%, equity securities gains (losses) decreased 357.6%, fixed income securities gains (losses) increased 107.0%, and other noninterest income increased 18.5%.

The increase in service charges on deposit accounts resulted mainly from the strong core deposit growth experienced by the Company. The decrease in loan sales and servicing income includes adjustments of approximately $5.8 million related to assumption changes and impairment losses recognized during the third quarter of 2002 on securitized residual interests. In its normal quarterly review of key assumptions and in light of significant declines in interest rates and other changes in market factors during the quarter, the Company reviewed the valuation of assets related to securitizations and adjusted retained interests to reflect current portfolio characteristics and performance. See subsequent section entitled “Critical Accounting Policies” for details on the assumption changes. Impairment losses were also recognized on other residual securitization interests where declines in value were determined to be other than temporary. The equity securities loss for the third quarter of 2002 consists mainly of the write-downs of venture capital investments and the minority interest in an investment banking firm as previously discussed. The equity securities gain for the third quarter of 2001 includes a $20.6 million gain involving the Company’s investment in Concord EFS, Inc., a $13.6 million write-down in venture capital investments and a $3.3 million gain on the sale of other equity securities. The increase in other income is mainly the result of increased income from the Company’s equity in earnings of unconsolidated investee companies and increased income from bank-owned life insurance.

Noninterest income for the nine months ended September 30, 2002 was $270.2 million, a decrease of 12.9% from the $310.4 million for the same period in 2001. Excluding equity securities gains (losses), noninterest income would have increased $25.3 million or 9.3%. Comparing the segments of noninterest income for the first nine months of 2002 with the first nine months of 2001, service charges on deposit accounts increased 20.4%, loan sales and servicing income decreased 29.3%, other service charges, commissions and fees increased 12.6%, income from securities conduit increased 61.2%, market making, trading and nonhedge

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ZIONS BANCORPORATION AND SUBSIDIARIES

derivative income increased 8.8%, equity securities gains (losses) decreased 162.9%, fixed income securities gains (losses) increased 109.8%, and other noninterest income increased 32.7%.

As mentioned in the quarterly analysis, the increase in service charges on deposit accounts result mainly from the strong core deposit growth experienced by the Company as well as acquisitions consummated during 2001. The decrease in loan sales and servicing income results primarily from the third quarter of 2002 adjustments previously discussed and a write-down during the first quarter of 2002 of approximately $13.5 million on the capitalized residual cash flows related to an auto securitization nonhedge derivative transaction. The $13.5 million fair value of a swap entered into in this transaction was recorded as an asset, and nonhedge derivative income was increased by this amount.

Income from securities conduit represents liquidity, interest rate agreement, and administrative fees from a sponsored qualified special purpose entity securities conduit established during 2001. The increased fees result from increases in the conduit’s securities portfolio activity.

The year-to-date equity securities loss for 2002 results mainly from the write-downs discussed in the quarterly analysis. Equity security gains for the first nine months of 2001 included gains of $70.8 million from the Concord EFS, Inc. transactions and losses of $36.7 million from write-downs of certain venture capital investments. Fixed income securities losses for the first nine months of 2001 included an impairment loss of approximately $4.9 million on SBA interest-only securities.

Changes in other noninterest income between the comparable nine-month periods include a $2.3 million increase in income from bank-owned life insurance and a $4.0 million increase in the Company’s equity in earnings of unconsolidated investee companies. Other income for the first nine months of 2002 also includes a pretax gain of approximately $3.2 million from the sales of three California branches recognized during the first quarter of 2002. The after-tax gain from the sales was approximately $1.4 million.

NONINTEREST EXPENSE

Noninterest expense for the third quarter of 2002 was $219.2 million, an increase of $4.6 million, or 2.1% over $214.6 million for the third quarter of 2001. Excluding the amortization of goodwill in the third quarter of 2001, noninterest expense increased $12.9 million, or 6.3%. Comparing the significant changes in noninterest expense segments for the third quarter of 2002 with the third quarter of 2001, salaries and employee benefits increased 12.9%, occupancy increased 5.6%, legal and professional fees decreased 39.2%, merger related expense and amortization of goodwill decreased to zero balances, and amortization of core deposit and other intangibles decreased 5.4%. The Company also incurred restructuring charges and impairment losses during the third quarter of 2002. The total of all other noninterest expenses decreased 3.4%.

Expenses for the third quarter of 2001 do not include expenses associated with the operations of Minnequa Bancorp, which was acquired during the fourth quarter of 2001. The $14.2 million increase in salaries and benefits for the third quarter of 2002 compared to the third quarter of 2001 includes increased salaries of $9.0 million (a 9.4% increase) and benefits of $5.2 million (a 34.8% increase). The increase in benefits is mainly the result of increased pension and employee medical benefits expense. The decrease in legal and professional fees is mainly attributable to $2.0 million in legal and accounting fees incurred during the third quarter of 2001 related to the Concord EFS, Inc. transaction and decreased fees incurred in e-commerce initiatives. The restructuring charges and impairment losses on long-lived assets incurred during the third quarter have been previously discussed. The 3.4% decrease in all other noninterest expenses, which includes

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a 10.9% decrease in postage and supplies and a 26.4% decrease in advertising expense, reflects the Company’s ongoing expense containment efforts.

Noninterest expense for the nine months ended September 30, 2002 was $640.1 million compared to $622.0 million for the nine months ended September 30, 2001, an increase of 2.9%. Excluding the amortization of goodwill in the nine months ended September 30, 2001 as required by FASB Statement No. 142, noninterest expense increased $41.2 million or 6.9%. Comparing significant changes in noninterest expense segments for the first nine months of 2002 with the same period for 2001, salaries and employee benefits increased 10.6%, occupancy increased 10.0%, legal and professional fees decreased 22.9%, merger-related expense and amortization of goodwill decreased to zero balances, and amortization of core deposit and other intangibles increased 7.1%. Restructuring charges and impairment losses are also included in noninterest expense for the nine months ended September 30, 2002. The total of all other noninterest expenses increased 3.3%.

Expenses for the nine months ended September 30, 2001 do not include expenses associated with the operations of Minnequa Bancorp which was acquired during the fourth quarter of 2001 and only include expenses of Eldorado Bancshares and branches acquired in Arizona from Pacific Century Bank for the second and third quarters of 2001. The increase in amortization of core deposits and other intangibles reflects increased amortization related to these acquisitions. The increase in restructuring charges and impairment losses on long-lived assets and the decrease in legal and professional fees have been previously discussed.

At September 30, 2002, the Company had 8,049 full-time equivalent employees, 409 domestic offices, and 588 ATMs, compared to 7,697 full-time equivalent employees, 408 offices, and 539 ATMs at September 30, 2001.

INCOME TAXES

The Company’s income taxes decreased 26.2% to $31.8 million for the third quarter of 2002 compared to $43.0 million for the third quarter of 2001. The Company’s income taxes were $120.7 million for the first nine months of 2002, compared to $122.8 million for the same period in 2001. The Company’s effective income tax rate was 33.6% for the third quarter of 2002, compared to 36.7% for the third quarter of 2001. The effective income tax rate for the first nine months of 2002 was 34.4% compared to 36.1% for the first nine months of 2001. The lower effective rate is mainly due to higher book income resulting from the nonamortization of goodwill in 2002.

DISCONTINUED OPERATIONS

See Note 3 of the Notes to Consolidated Financial Statements for a description of discontinued operations and a summary of revenues and expenses for the three months ended September 30, 2002 and 2001 and the nine months ended September 30, 2002 and 2001. The increase in revenues, expenses and pretax loss from the operations of discontinued subsidiaries for the nine months ended September 30, 2002 compared to the nine months ended September 30, 2001 results mainly from the operations of the companies acquired to form Lexign, Inc. being included only in 2001 results from the date of their respective acquisitions in July 2001.

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ANALYSIS OF FINANCIAL CONDITION

EARNING ASSETS

Average earning assets increased 11.6% to $22,969 million for the nine months ended September 30, 2002, compared to $20,590 million for the nine months ended September 30, 2001. Earning assets comprised 88.1% of total average assets for the first nine months of 2002, compared with 87.8% for the first nine months of 2001.

Average money market investments, consisting of interest-bearing deposits, federal funds sold and security resell agreements increased 9.3% to $1,022 million in the first nine months of 2002 as compared to $935 million in the first nine months of 2001.

Average securities decreased 0.1% to $3,922 million for the first nine months of 2002 compared to $3,928 million for the first nine months of 2001. Average investment portfolio securities increased 0.4% and average trading securities decreased 2.9%.

Average net loans and leases increased 14.6% to $18,025 million for the first nine months of 2002 compared to $15,727 million for the first nine months of 2001, representing 78.5% of earning assets in the first nine months of 2002 compared to 76.4% in the first nine months of 2001. Average net loans and leases were 98.8% of average total deposits for the nine months ended September 30, 2002, as compared to 95.7% for the first nine months of 2001.

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INVESTMENT SECURITIES

The following table presents the Company’s held-to-maturity and available-for-sale investment securities:

	September 30, 2002				December 31, 2001				September 30, 2001
(In millions)	Amortized Cost		Market Value		Amortized Cost		Market Value		Amortized Cost		Market Value
HELD TO MATURITY
Mortgage-backed securities	$	—	$	—	$	79	$	80	$	54	$	54
		—		—		79		80		54		54
AVAILABLE FOR SALE
U.S. Treasury securities		48		51		61		63		54		57
U.S. government agencies and corporations:
Small Business Administration loan-backed securities		763		766		674		674		626		625
Other agency securities		314		319		769		781		809		824
States and political subdivisions		578		606		505		514		472		488
Mortgage/asset-backed and other debt securities		1,043		1,073		960		969		991		1,008
		2,746		2,815		2,969		3,001		2,952		3,002
Equity securities:
Mutual funds:
Accessor Funds, Inc.		218		224		266		267		234		237
Stock		14		21		10		16		10		11
		232		245		276		283		244		248
		2,978		3,060		3,245		3,284		3,196		3,250
Total	$	2,978	$	3,060	$	3,324	$	3,364	$	3,250	$	3,304

LOANS

The Company has structured its organization to separate the lending function from the credit review function to strengthen the control and independent evaluation of credit activities. Loan policies and procedures provide the Company with a framework for consistent underwriting and a basis for sound credit decisions. In addition, the Company has well-defined standards for grading its loan portfolio, and management utilizes the comprehensive loan grading system to determine risk potential in the portfolio. Another aspect of the Company’s credit risk management strategy is the diversification of the loan portfolio. The Company has a diversified loan portfolio with some emphasis in real estate (as set forth in the following table), but has no significant exposure to highly leveraged transactions. For the quarter ended September 30, 2002, the Company changed its presentation format for loan types to more accurately present loan purpose. Information to present prior period balances in the revised format is not currently available.

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The table below sets forth the amount of loans outstanding by loan reflecting the change in presentation format for the current quarter:

(In millions)	September 30, 2002
Loan type
Loans held for sale	$	250
Commercial lending:
Commercial and industrial		4,010
Leasing		386
Owner occupied		2,857
Total commercial		7,253
Commercial real estate:
Construction		3,080
Term		3,083
Total commercial real estate		6,163
Consumer:
Home equity credit line		679
1-4 family residential		3,222
Bankcard and other revolving plans		123
Other		631
Total consumer		4,655
Foreign loans		25
Other receivables		70
Total loans	$	18,416

The table below sets forth the amount of loans outstanding by loan type as presented in prior periods:

(In millions)	December 31, 2001		September 30, 2001
Loan type
Loans held for sale	$	298	$	261
Commercial, financial, and agricultural		4,109		4,046
Real estate:
Construction		2,936		2,851
Other:
Home equity credit line		401		339
1-4 family residential		3,168		2,973
Other real estate-secured		5,126		5,110
		8,695		8,422
		11,631		11,273
Consumer:
Bankcard and other revolving plans		126		109
Other		707		676
		833		785
Lease financing		421		416
Foreign loans		14		14
Other receivables		107		84
Total loans	$	17,413	$	16,879

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Loans held for sale on September 30, 2002 decreased 16.1% from December 31, 2001. All other loans, net of unearned income and fees, increased 6.2% to $18,071 million on September 30, 2002 compared to $17,013 million on December 31, 2001.

On September 30, 2002, long-term conforming first mortgage real estate loans serviced for others totaled $462 million, and consumer and other loan securitizations, which include loans sold under revolving securitization structures, totaled $3,013 million. During the first nine months of 2002, the Company sold $377 million of loans classified in held for sale. In addition, the Company sold and securitized SBA loans, home equity credit line loans, credit card receivables, Farmer Mac, and automobile loans totaling $1,206 million. During the first nine months of 2002, total loans sold were $1,583 million compared to total loans sold of $1,387 million during the first nine months of 2001.

As of September 30, 2002, the following table shows that the Company had residual interests of $292 million recorded on its balance sheet related to the $3,013 million of loans sold to securitized trusts. The Company does not control or have any equity interest in the trusts. However, as is common with securitized transactions, the Company has retained subordinated interests of $162 million representing the Company’s junior position to other investors in the securities. The capitalized residual cash flows (sometimes referred to in the industry as “excess servicing”) of $130 million principally represent the present value of estimated excess cash flows over the life of the sold loans. These excess cash flows are subject to prepayment and credit risk.

	Sold loans being serviced				Residual interests on balance sheet at September 30, 2002
(In millions)	Sales for nine months ended September 30, 2002		Outstanding balance at September 30, 2002		Subordinated retained interest		Capitalized residual cash flows		Total
Auto loans	$	232	$	387	$	32	$	7	$	39
Home equity credit lines		280		447		8		9		17
Bankcard receivables		178		72		4		1		5
Nonconforming residential real estate loans		—		103		3		3		6
SBA 504 loans		442		1,397		115		103		218
SBA 7(a) loans		11		210		—		2		2
Farmer Mac		63		397		—		5		5
Total	$	1,206	$	3,013	$	162	$	130	$	292

RISK ELEMENTS

The Company’s nonperforming assets, which include nonaccrual loans, restructured loans, other real estate owned and other nonperforming assets, were $132 million on September 30, 2002, up from $120 million on December 31, 2001, and up from $109 million on September 30, 2001. Such nonperforming assets as a percentage of net loans and leases, other real estate owned and other nonperforming assets were 0.72% on September 30, 2002, compared to 0.69% on December 31, 2001 and 0.65% on September 30, 2001.

Accruing loans past due 90 days or more totaled $35 million on September 30, 2002, down from $46 million on December 31, 2001 and $47 million on September 30, 2001. These loans equaled 0.19% of net loans and leases on September 30, 2002, 0.27% on December 31, 2001, and 0.28% on September 30, 2001.

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The Company’s total recorded investment in impaired loans included in nonaccrual loans and leases amounted to $75 million on September 30, 2002, as compared to $80 million on December 31, 2001, and $66 million on September 30, 2001. The Company considers a loan to be impaired when the accrual of interest has been discontinued and it meets other applicable criteria under current accounting standards. The amount of the impairment is measured based on the present value of expected cash flows, the observable market price of the loan, or the fair value of the collateral. Impairment losses are included in the allowance for loan losses through a provision for loan losses. Included in the allowance for loan losses on September 30, 2002, December 31, 2001, and September 30, 2001, is a required allowance of $13 million, $18 million and $8 million, respectively, on $44 million, $20 million and $24 million, respectively, of the recorded investment in impaired loans.

The following table sets forth the nonperforming assets:

(In millions)	September 30, 2002			December 31, 2001			September 30, 2001
Nonaccrual loans	$	117		$	109		$	92
Restructured loans		2			1			2
Other real estate owned and other nonperforming assets		13			10			15
Total	$	132		$	120		$	109
% of net loans and leases*, other real estate     owned and other nonperforming assets		0.72	%		0.69	%		0.65	%
Accruing loans past due 90 days or more	$	35		$	46		$	47
% of net loans and leases*		0.19	%		0.27	%		0.28	%

* Includes loans held for sale.

ALLOWANCE FOR LOAN LOSSES

The Company’s allowance for loan losses was 1.45% of net loans and leases on September 30, 2002, compared to 1.50% on December 31, 2001 and 1.47% on September 30, 2001. Net charge-offs during the third quarter of 2002 were $21.3 million, or annualized 0.46% of average net loans and leases, compared to net charge-offs of $15.4 million (annualized 0.34%) for the second quarter of 2002, and $5.5 million (annualized 0.13%) for the third quarter of 2001. Net charge-offs for the first nine months of 2002 were $51.2 million, or annualized, 0.38% of average net loans and leases, compared to $20.2 million (annualized 0.17%) for the first nine months of 2001.

The allowance, as a percentage of nonaccrual loans and restructured loans, was 222.4% on September 30, 2002, compared to 236.7% on December 31, 2001 and 262.9% on September 30, 2001. The allowance, as a percentage of nonaccrual loans and accruing loans past due 90 days or more was 173.9% on September 30, 2002, compared to 168.2% on December 31, 2001 and 177.2% on September 30, 2001.

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At September 30, 2002, the allowance for loan losses includes an allocation of $10 million related to commitments to extend credit for which the Company could separate the credit risk from that of any related loans on the balance sheet and for standby letters of credit. Commitments to extend credit on loans and standby letters of credit on September 30, 2002, December 31, 2001, and September 30, 2001 totaled $7,702 million, $6,812 million, and $7,615 million, respectively.

In analyzing the adequacy of the allowance for loan and lease losses, management utilizes a comprehensive loan grading system to determine risk potential in the portfolio, and considers the results of independent internal and external credit reviews, historical charge-off experience, and changes in the composition and volume of the portfolio. Other factors, such as general economic conditions and collateral values, are also considered. Larger problem credits are individually evaluated to determine appropriate reserve allocations. Additions to the allowance are based upon the resulting risk profile of the portfolio developed through the evaluation of the above factors.

The following table shows the changes in the allowance for loan losses and a summary of loan loss experience:

(In millions)	Nine Months Ended September 30, 2002			Twelve Months Ended December 31, 2001			Nine Months Ended September 30, 2001
Average loans* and leases outstanding     (net of unearned income)	$	18,025		$	16,015		$	15,727
Allowance for possible losses:
Balance at beginning of year	$	260		$	196		$	196
Allowance of companies acquired		—			30			24
Provision charged against earnings		56			73			46
Loans and leases charged-off:
Commercial, financial and agricultural		(34	)		(30	)		(14	)
Real estate		(6	)		(5	)		(4	)
Consumer		(13	)		(13	)		(9	)
Lease financing		(10	)		(7	)		(5	)
Total		(63	)		(55	)		(32	)
Recoveries:
Commercial, financial and agricultural		7			10			8
Real estate		1			2			1
Consumer		3			3			2
Lease financing		1			1			1
Total		12			16			12
Net loan and lease charge-offs		(51	)		(39	)		(20	)
Balance at end of period	$	265		$	260		$	246
*Includes loans held for sale
Ratio of annualized net charge-offs to average loans and leases		0.38	%		0.24	%		0.17	%

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DEPOSITS

Total deposits increased 9.2% to $19,481 million on September 30, 2002 as compared to $17,842 million on December 31, 2001. The Company’s core deposits, consisting of demand, savings and money market deposits and time deposits under $100,000, increased 11.6% from December 31, 2001. Comparing September 30, 2002 to December 31, 2001, demand deposits increased 10.1%, savings and money market deposits increased 17.2%, time deposits under $100,000 decreased 10.7%, time deposits $100,000 and over decreased 12.3%, and foreign deposits decreased 13.5%.

Average total deposits of $18,252 million for the first nine months of 2002 increased 11.1% compared to $16,427 million for the first nine months of 2001, with average demand deposits increasing 16.1%. Average savings and NOW deposits increased 25.1% and average money market and super NOW deposits increased 12.6% during the first nine months of 2002 compared with the same period one year earlier.

Average time deposits under $100,000 decreased 5.5% and time deposits $100,000 and over decreased 2.8% for the first nine months of 2002 compared to the first nine months of 2001. Average foreign deposits decreased 3.9% for the same periods.

LIQUIDITY AND INTEREST RATE SENSITIVITY

The Company manages its liquidity to provide adequate funds to meet its anticipated financial obligations, including withdrawals by depositors and debt service requirements, as well as to fund customers’ demand for credit. Liquidity is provided primarily by the regularly scheduled maturities of the Company’s investment and loan portfolios.

The Federal Home Loan Bank (“FHLB”) system is a major source of liquidity for each of the Company’s subsidiary banks. Zions First National Bank and The Commerce Bank of Washington are members of the FHLB of Seattle. California Bank & Trust, Nevada State Bank, and National Bank of Arizona are members of the FHLB of San Francisco. Vectra Bank Colorado is a member of the FHLB of Topeka. The FHLB allows member banks to borrow against their eligible loans to satisfy liquidity requirements.

As another source of liquidity, the Company’s core deposits, consisting of demand, savings and money market deposits and time deposits under $100,000, constituted 91.9% of total deposits on September 30, 2002, as compared to 89.9% on December 31, 2001 and 89.8% on September 30, 2001.

Maturing balances in loan portfolios provide flexibility in managing cash flows. Maturity management of those funds is an important source of medium to long-term liquidity. The Company’s ability to raise funds in the capital markets through the securitization process and by debt issuance provides the Company additional flexibility in meeting funding needs.

On August 21, 2002, the Company sold $285 million of 8.00% Capital Securities issued by a newly formed subsidiary of the Company, Zions Capital Trust B (the “Trust”). The Capital Securities represent undivided beneficial ownership interests in the assets of the Trust (consisting of junior subordinated debentures issued by the Company). Holders of the Capital Securities are entitled to receive cumulative cash distributions at an annual rate of 8.00%. The cash distributions, which are payable quarterly in arrears beginning December 1, 2002, match the timing and amount of the Company's interest obligations on the junior subordinated debentures. The Company has unconditionally guaranteed the payment of all amounts due on the Capital Securities to the extent the Trust has funds available for the payment of such amounts. The Company can, on one or more occasions, defer the quarterly interest payments on the junior subordinated debentures for up to five years. This would also have the effect of deferring payments on the Capital Securities. The Capital Securities are scheduled to be redeemed on September 1, 2032 and can be redeemed in whole or in part on or after September 1, 2007 or upon certain changes in tax laws and regulations or in the treatment of the Capital Securities for bank regulatory purposes. The Capital Securities, junior subordinated debentures and the guarantee were registered with the Securities and Exchange Commission in August 2002.

During the third quarter of 2002, the Company also filed a prospectus supplement with the Securities and Exchange Commission for the issuance of up to

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$340 million of Senior Medium-Term Notes, Series A and Subordinated Medium-Term Notes, Series B. The Company may issue such debt from time to time with the terms of each note issuance to be specified in a pricing supplement filed with the Securities and Exchange Commission. As of September 30, 2002, the Company had not issued any of such debt.

The parent company’s cash requirements consist primarily of debt service, operating expenses, income taxes, dividends to shareholders, and share repurchases. The parent’s cash needs are routinely met through dividends from subsidiaries, proportionate shares of current income taxes, management and other fees, unaffiliated bank lines, and debt issuance.

At September 30, 2002, $282.5 million of dividend capacity was available from subsidiaries to pay to the parent without having to obtain regulatory approval. Dividends received by the parent from subsidiaries were $6.5 million for the third quarter of 2002 and $127.3 million for the nine months ended September 30, 2002. The parent also has a program to issue short-term commercial paper. At September 30, 2002, outstanding commercial paper was $339.6 million. At September 30, 2002, the parent had a revolving credit facility with a bank totaling $40 million and a margin borrowing facility totaling $16.8 million. The parent did not have any outstanding borrowings on either of these facilities at September 30, 2002.

Zions First National Bank (“ZFNB”) provides a $5.1 billion liquidity facility for a fee to a qualified special purpose entity securities conduit (“conduit”). ZFNB also provides for a fee administrative and investment advisory services and a spread maintenance agreement to the conduit to ensure a positive interest rate spread. The conduit purchases U.S. Government-backed and AAA rated securities. These assets are funded through the issuance of commercial paper. With certain limitations, ZFNB is required to advance funds to the conduit to repay maturing commercial paper upon the conduit’s inability to access the commercial paper market or upon a commercial paper market disruption. No amounts were outstanding under this liquidity facility at September 30, 2002.

During 2001 and up to September 30, 2002, the Company’s board of directors authorized repurchases of the Company’s common stock up to the following amounts: $50 million on July 30, 2001, $55 million on January 18, 2002, and $50 million on July 18, 2002. During 2001, the Company repurchased approximately 883 thousand common shares at a cost of $46.5 million. For the nine months ended September 30, 2002, the Company repurchased approximately 1,635 thousand shares at a cost of $83.5 million. This included 592 thousand shares purchased during the third quarter of 2002 at a cost of $27.0 million. At September 30, 2002, the amount still available for repurchase was approximately $24.9 million. From October 1, 2002 through October 18, 2002, the Company repurchased approximately 188 thousand shares at a cost of $7.3 million of its common stock. On October 18, 2002, the board of directors increased the remaining authorization up to $50 million.

Interest rate sensitivity measures the Company’s financial exposure to changes in interest rates. Interest rate sensitivity is, like liquidity, affected by maturities of assets and liabilities. The Company assesses its interest rate sensitivity using duration and simulation analysis. Duration is a measure of the weighted-average expected lives of the discounted cash flows from assets and liabilities. Simulation is used to estimate net interest income over time using alternative interest rate scenarios.

The Company, through the management of maturities and repricing of its assets and liabilities and the use of certain derivative instruments, including interest rate caps, floors, futures, options and exchange agreements, attempts to manage the effect on net interest income of changes in interest rates. The prime lending rate and the LIBOR (London Interbank Offer Rate) curve, are the primary indices used for pricing the Company’s loans, and the 91-day Treasury bill rate is the index used for pricing many of the Company’s deposits. The Company does not hedge the prime/LIBOR/T-bill spread risk through the use of derivative instruments.

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CAPITAL RESOURCES AND DIVIDENDS

Total shareholders’ equity on September 30, 2002 was $2,358 million, an increase of 3.4% over the $2,281 million on December 31, 2001, and an increase of 5.5% over the $2,235 million on September 30, 2001. The Company’s tangible common equity ratio (which measures tangible equity to tangible assets) was 6.09% at September 30, 2002 compared to 5.98% at December 31, 2001 and 5.88% at September 30, 2001. The ratio of average equity to average assets for the first nine months of 2002 was 8.94% as compared to 8.91% for the same period in 2001. On September 30, 2002, the Company’s total risk-based capital ratio was 13.16%, as compared to 12.20% on December 31, 2001 and 11.12% on September 30, 2001. On September 30, 2002, the Company’s Tier I risk-based capital ratio was 9.40%, as compared to 8.25% on December 31, 2001 and 8.15% on September 30, 2001. The Company’s leverage ratio on September 30, 2002 was 7.60% compared to 6.56% on December 31, 2001 and 6.48% on September 30, 2001. The increased capital ratios as of September 30, 2002 reflect the sale during the quarter of $285 million in Capital Securities as previously discussed. Subject to certain regulatory limits these securities qualify as part of Tier I capital.

Dividends declared of $.20 per common share for the third quarter of 2002 were unchanged from the dividends declared for the first and second quarters of 2002 and each quarter during 2001. The common cash dividend payout of net income for the third quarter of 2002 was 46.4% compared to 22.4% for the second quarter of 2002 and 25.4% for the third quarter of 2001.

CRITICAL ACCOUNTING POLICIES

The Company has reviewed and made no significant changes in critical accounting policies and assumptions compared to the disclosures made in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2001, except for the following changes in assumptions related to its revolving home equity loans securitization.

During the third quarter of 2002, the Company determined that certain assumptions used to measure retained interests on its home equity loans securitization were not reflective of current portfolio characteristics and performance. Accordingly the following assumption changes were made during the quarter:

	Revised Assumptions		Prior Assumptions
Prepayment method		CPR		ABS
Annualized prepayment speed		17		7
Weighted average life (in months)		16		25

The effect of the changes was to reduce the carrying value of the retained interests as of September 30, 2002 and loan sales and servicing income for the third quarter of 2002 by approximately $3.1 million.

FORWARD-LOOKING INFORMATION

Statements in Management’s Discussion and Analysis that are not based on historical data are forward- looking, including, for example, the projected performance of the Company and its operations. These statements constitute forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from the projections discussed in Management’s Discussion and Analysis since such projections involve significant risks and uncertainties. Factors that might cause such differences include, but are not limited to: the timing of closing proposed acquisitions being

34

ZIONS BANCORPORATION AND SUBSIDIARIES

delayed or such acquisitions being prohibited; competitive pressures among financial institutions increasing significantly; economic conditions, either nationally or locally in areas in which the Company conducts its operations, being less favorable than expected; and legislation or regulatory changes which adversely affect the Company’s operations or business. The Company disclaims any obligation to update any factors or to publicly announce the results of revisions to any of the forward-looking statements included herein to reflect future events or developments.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest rate risk is the most significant market risk regularly undertaken by the Company. The Company believes there have been no significant changes in market risk compared to the disclosures in Zions Bancorporation’s Annual Report on Form 10-K for the year ended December 31, 2001.

ITEM 4. CONTROLS AND PROCEDURES

Within the 90-day period prior to the filing of this report, an evaluation was carried out under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities Exchange Act of 1934). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective. There have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation.

PART II.   OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is a defendant in various legal proceedings arising in the normal course of business. The Company does not believe that the outcome of any such proceedings will have a material adverse effect on its consolidated financial position, operations, or liquidity.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         a)       Exhibits

Exhibit Number Description

3.1 Restated Articles of Incorporation of Zions Bancorporation, dated November 8, 1993, incorporated by reference to Exhibit 3.1 of Form S-4 filed on November 22, 1993. *

3.2 Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation, dated April 30, 1997, incorporated by reference to Exhibit 3 of Form 10-Q for the quarter ended June 30, 1997. *

3.3 Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation, dated April 24, 1998, incorporated by reference to Exhibit 3 of Form 10-Q for the quarter ended June 30, 1998. *

3.4 Articles of Amendment to the Restated Articles of Incorporation of Zions Bancorporation, dated April 25, 2001, incorporated by reference to Exhibit 3.6 of Form S-4 filed on July 13, 2001. *

3.5 Restated Bylaws of Zions Bancorporation adopted January 19, 2001, incorporated by reference to Exhibit 3.4 of Form S-4 filed on February 5, 2001. *

4	Shareholder Protection Rights Agreement, dated September 27, 1996, incorporated by reference to Exhibit 1 of Form 8-K filed on October 11, 1996.	*
10.1	Form of Zions Bancorporation Change in Control Agreement.
	*Incorporated by reference

         b)       Reports on Form 8-K

Zions Bancorporation filed the following reports on Form 8-K during the quarter ended September 30, 2002:

Form 8-K filed on July 23, 2002 (Item 5) Exhibit 99.1 – Copy of press release issued July 18, 2002 announcing the Board of Directors’ authorization of a $50 million stock buyback and a $0.20 dividend payable August 28, 2002.

Form 8-K filed on August 6, 2002 (Item 5) Exhibit 99.1 – Copy of press release issued July 17, 2002 announcing second quarter earnings.

Form 8-K filed on August 15, 2002 (Item 9) – Copies of sworn statements submitted August 13, 2002 by the Chief Executive Officer, Harris H. Simmons, and Chief Financial Officer, Doyle L. Arnold, to the Securities and Exchange Commission

35

ZIONS BANCORPORATION AND SUBSIDIARIES

pursuant to Securities and Exchange Commission Order No. 4-460. Also copies of the certifications submitted by Mr. Simmons and Mr. Arnold on August 13, 2002, of Zions Bancorporation’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2002, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Form 8-K filed on August 21, 2002 – Exhibits to its Registration Statement on Form S-3 (File Nos. 333-89202, 333-89202-01, 333-89202-02, and 333-89202-03), which was declared effective on August 9, 2002.

Form 8-K filed on September 11, 2002 – Exhibits to its Registration Statement on Form S-3 (File Nos. 333-89202, 333-89202-01, 333-89202-02, and 333-89202-03), which was declared effective on August 9, 2002.

36

ZIONS BANCORPORATION AND SUBSIDIARIES

S I G N A T U R E S

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ZIONS BANCORPORATION

/s/ HARRIS H. SIMMONS

Harris H. Simmons, Chairman, President
and Chief Executive Officer

/s/ DOYLE L. ARNOLD

Doyle L. Arnold, Executive Vice
President and Chief Financial Officer

Dated November 14, 2002

37

ZIONS BANCORPORATION AND SUBSIDIARIES

C E R T I F I C A T I O N
Principal Executive Officer

I, Harris H. Simmons, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002	/s/ HARRIS H.SIMMONS
	Harris H. Simmons, Chairman, President and Chief Executive Officer

38

ZIONS BANCORPORATION AND SUBSIDIARIES

C E R T I F I C A T I O N
Principal Financial Officer

I, Doyle L. Arnold, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Zions Bancorporation;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
b)	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the “Evaluation Date”); and
c)	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent function):

a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and
b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and

6. The registrant’s other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: November 14, 2002	/s/ DOYLE L. ARNOLD
	Doyle L. Arnold, Executive Vice President and Chief Financial Officer

39

EX-10.1

Exhibit 10.1

[FORM OF AGREEMENT]

ZIONS BANCORPORATION
CHANGE IN CONTROL AGREEMENT

SENIOR EXECUTIVES

The Company is a party to a Change in Control Agreement with each of Harris H. Simmons, David E. Blackford, A. Scott Anderson, John J. Gisi, W. David Hemingway (Named Executive Officers), as well as Doyle L. Arnold, chief financial officer, and certain other executive officers in the form attached hereto. Each such agreement is dated August 19, 2002.

[FORM OF AGREEMENT]

ZIONS BANCORPORATION
CHANGE IN CONTROL AGREEMENT

SENIOR EXECUTIVES

August 19, 2002

[Name]
[Address]
[Address]

Dear [First Name]:

                  Zions Bancorporation (the “Company”) considers it essential to the best interests of its shareholders to foster the continuous employment of key management personnel. In connection with this, the Company’s Board of Directors (the “Board”) recognizes that, as is the case with many publicly held corporations, the possibility of a change in control of the Company may exist and that the uncertainty and questions that it may raise among management could result in the departure or distraction of management personnel to the detriment of the Company and its shareholders.

                  The Board has determined that it is in the best interests of the Company and its shareholders to reinforce and encourage the continued attention and dedication of members of the Company’s management, including yourself, to their assigned duties without the distraction arising from the event of any threat or occurrence of a change in control of the Company.

                  In order to induce you to remain in the employ of the Company or any of its affiliates (collectively, the “Company”), the Company hereby agrees that after this letter agreement (this “Agreement”) has been fully executed, you shall receive the severance benefits set forth in Section 5 of this Agreement in the event your employment with the Company is terminated under the circumstances described in Section 4 of this Agreement subsequent to a Change in Control (as defined in Section 2).

                  1.         Term of Agreement. This Agreement shall commence on the date hereof and shall continue in effect through December 31, 2004; provided, however, that commencing on March 1, 2003 and on each March 1 thereafter, the term of this Agreement shall automatically be extended for one (1) additional year unless, not later than March 1 of that preceding year, the Company shall have given written notice to you that it does not wish to extend this Agreement;

2

provided, further, that if a Change in Control occurs during the original or any extended term of this Agreement, the term of this Agreement shall continue in effect for a period of not less than thirty-six (36) months beyond the month in which such Change in Control occurred.

                  2.         Change in Control. No benefits shall be payable under Section 5 of this Agreement unless there has been a Change in Control. A “Change in Control” shall mean:

                  (a)         any Person (as defined in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) is or becomes the Beneficial Owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities (“Outstanding Company Voting Securities”); provided, however, that the event described in this subsection (a) shall not be deemed a Change in Control by virtue of any of the following acquisitions: (i) by the Company or any corporation controlled by the Company, (ii) by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, (iii) by any underwriter temporarily holding securities pursuant to an offering of such securities, (iv) pursuant to a Non-Qualifying Transaction (as defined in subsection (c) below), (v) pursuant to any acquisition by you or any group of persons including you (or any entity controlled by you or any group of persons including you), (vi) a transaction (other than one described in subsection (c) below) in which Outstanding Company Voting Securities are acquired from the Company, if a majority of the Continuing Directors (as defined in subsection (b) below) approve a resolution providing expressly that the acquisition pursuant to this clause (vi) does not constitute a Change in Control under this subsection (a) for any or all purposes of this Agreement or (vii) any acquisition by a Person of 20% of the Outstanding Company Voting Securities as a result of an acquisition of common stock of the Company by the Company which, by reducing the number of shares of common stock of the Company outstanding, increases the proportionate number of shares beneficially owned by such Person to 20% or more of the Outstanding Company Voting Securities; provided, however, that if a Person shall become the beneficial owner of 20% or more of the Outstanding Company Voting Securities by reason of a share acquisition by the Company as described above and shall, after such share acquisition by the Company, become the beneficial owner of any additional shares of common stock of the Company, then such acquisition shall constitute a Change in Control;

                  (b)         individuals who, on August 19, 2002, constitute the Board (“Continuing Directors”), cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to such date whose election or nomination for election was approved by a vote of at least a majority of the Continuing Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director, without written objection to such nomination) shall be a Continuing Director; provided, however, that no individual initially elected or nominated as a director of the Company as a result of an actual or threatened election contest with respect to directors or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board shall be deemed to be a Continuing Director;

3

                  (c)         the consummation of a merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Company or any of its Subsidiaries that requires the approval of the Company’s shareholders, whether for such transaction or the issuance of securities in the transaction (a “Business Combination”), unless immediately following such Business Combination: (i) more than 50% of the total voting power of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, the ultimate parent corporation that directly or indirectly has beneficial ownership of at least 95% of the voting securities eligible to elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by Company Voting Securities that were outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportion as the voting power of such Company Voting Securities among the holders thereof immediately prior to the Business Combination, (ii) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation) is or becomes the beneficial owner, directly or indirectly, of 20% or more of the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) following the consummation of the Business Combination are Continuing Directors (any Business Combination which satisfies all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying Transaction”); provided, however, that if Continuing Directors constitute a majority of the Board immediately following the occurrence of a Business Combination, then a majority of Continuing Directors in office prior to the consummation of the Business Combination may approve a resolution providing expressly that such Business Combination does not constitute a Change in Control under this subsection (c) for any or all purposes of this Agreement;

                  (d)         the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company; or

                  (e)         the consummation of an agreement (or agreements) providing for the sale or disposition by the Company of all or substantially all of the Company’s assets other than a sale or disposition which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent 50% or more of the combined voting power of the Company or such surviving entity outstanding immediately after such sale or disposition.

                  3.         Accelerated Vesting Upon a Change in Control.

                  (a)         All outstanding options, if any, granted to you by the Board under any of the Company’s stock option plans, incentive plans, or other similar plans (or options substituted therefor covering the stock of a successor corporation) shall become fully vested and exercisable upon a Change in Control as to all shares of stock covered thereby, and the restricted period with respect to any restricted stock or any other equity

4

award granted to you thereunder shall lapse and such shares shall be distributed to you immediately upon a Change in Control.

                  (b)         All unpaid awards under the Senior Management Value Sharing Plan (“Value Sharing Plan”) will be payable at the higher of their target value as established by the Executive Compensation Committee of the Board (the “Committee”) or their value calculated under the terms of the Value Sharing Plan based on the average annual growth in Earnings per Share (as such term is defined in the Value Sharing Plan) and the average Tangible Return on Equity (as such term is defined in the Value Sharing Plan) from the inception of each Plan Period (as such term is defined in the Value Sharing Plan) through the fiscal quarter ending prior to the effective date of the Change of Control. Any such payments will be pro-rated based on multiplying them times a fraction, the numerator of which is the number of quarters completed in the performance cycle and the denominator of which is the original number of quarters in the performance cycle called for in the Value Sharing Plan.

                  4.         Termination of Employment Following a Change in Control.

                  (a)         General. During the term of this Agreement, if a Change in Control shall have occurred, you shall be entitled to the benefits provided in Section 5(c) upon the subsequent termination of your employment, provided that such termination occurs during the term of this Agreement and within the two (2) year period immediately following the date of such Change in Control, unless such termination is (i) because of your death or Disability (as defined in Section 4(b)), (ii) by the Company for Cause (as defined in Section 4(c)) or (iii) by you other than for Good Reason (as defined in Section 4(d)).

                  (b)         Disability. Your employment may be terminated for Disability. “Disability” means your absence from the full-time performance of your duties with the Company for six (6) consecutive months as a result of your incapacity due to physical or mental illness as determined by a physician selected by the Company and acceptable to you or by the company that administers the Company’s long-term disability plan in which you are participating. If the Company determines in good faith that your Disability has occurred, it may give you written notice in accordance with Section 7 of its intention to terminate your employment. In such event, your employment shall terminate effective on the thirtieth (30th) day after your receipt of such notice (the “Disability Effective Date”) unless within the thirty (30) days after such receipt, you shall not have returned to the full-time performance of your duties.

                  (c)         Cause. Termination by the Company of your employment for “Cause” shall mean termination (i) upon your willful and continued failure to substantially perform your duties with the Company (other than any such failure resulting from your Disability or any such actual or anticipated failure after your issuance of a Notice of Termination (as defined in Section 4(e)) for Good Reason (as defined in Section 4(d))), after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (ii) upon your willful and

5

continued failure to substantially follow and comply with the specific and lawful directives of the Board, as reasonably determined by the Board (other than any such failure resulting from your Disability or any such actual or anticipated failure after your issuance of a Notice of Termination for Good Reason), after a written demand for substantial performance is delivered to you by the Board, which demand specifically identifies the manner in which the Board believes that you have not substantially performed your duties, (iii) upon your commission of an act of fraud or dishonesty resulting in material economic or financial injury to the Company or (iv) upon your engagement in illegal conduct or gross misconduct, in each case which is materially and demonstrably injurious to the Company. For purposes of this subsection (c), no act or failure to act shall be considered “willful” unless done or omitted to be done in bad faith and without reasonable belief that your action or omission was in the best interests of the Company or its affiliates. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board, based upon the advice of counsel for the Company or upon the instructions of the Company’s chief executive officer shall be conclusively presumed to be done, or omitted to be done, by you in good faith and in the best interests of the Company. Cause shall not exist unless and until the Company has delivered to you a copy of a resolution duly adopted by three-quarters (3/4) of the entire Board (excluding you if you are a Board member) at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with counsel, to be heard before the Board), finding that in the good faith opinion of the Board an event set forth in clause (i), (ii), (iii) or (iv) has occurred and specifying the particulars thereof in detail. The Company must notify you of any event constituting Cause within ninety (90) days following the Company’s knowledge of its existence or such event shall not constitute Cause under this Agreement.

                  (d)         Good Reason. You shall be entitled to terminate your employment for Good Reason. For purposes of this Agreement, “Good Reason” shall mean, without your express written consent, the occurrence after a Change in Control of any of the following circumstances:

                   (i)         the assignment to you of any duties materially inconsistent with the position in the Company that you held immediately prior to the Change in Control, a significant adverse alteration in the nature or status of your responsibilities or the conditions of your employment from those in effect immediately prior to such Change in Control, or any other action by the Company that results in a material diminution in your position, authority, duties or responsibilities;

                   (ii)        the Company’s reduction by more than 10% of your annual total compensation as in effect on the date hereof or as the same may be increased from time to time;

                   (iii)       (1) the relocation of the Company’s offices at  which you are principally employed immediately prior to the Change in Control (your “Principal Location”) which results in the one-way commuting distance for you increasing by more than fifty (50) miles from your primary residence immediately

6

prior to a Change in Control, (2) the Company’s requiring you to be based anywhere other than your Principal Location or (3) the Company’s requiring you to travel on the Company’s business to an extent substantially greater than your business travel obligations immediately prior to the Change in Control;

                   (iv)       the Company’s failure to pay to you any portion of your current compensation or to pay to you any portion of an installment of deferred compensation under any deferred compensation program of the Company within thirty (30) days after the date such compensation is due;

                   (v)        the Company’s failure to continue (1) any material employee benefit plan, compensation plan, or material fringe benefit plan in which you participate immediately prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan or (2) your participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount and cost of benefits provided and the level of your participation relative to other participants, as existed immediately prior to the Change in Control;

                   (vi)       any purported termination of your employment that is not effected pursuant to a Notice of Termination satisfying the requirements of Section 4(e) hereof, which purported termination shall not constitute a termination for purposes of this Agreement; or

                   (vii)      the failure of the Company to obtain the assumption agreement from any successor as contemplated in Section 6(a).

                  Notwithstanding the foregoing, the Company placing you on a paid leave of up to ninety (90) days, pending the determination of whether there is a basis to terminate you for Cause, shall not constitute a “Good Reason” event; provided, that if you are subsequently terminated for Cause, then you shall repay any amounts paid by the Company to you during such leave period.

                  An isolated, insubstantial and inadvertent action taken in good faith and which is remedied by the Company within ten (10) days after receipt of notice thereof given by you shall not constitute a Good Reason event. Your right to terminate employment for Good Reason shall not be affected by your incapacity due to mental or physical illness, and your continued employment shall not constitute consent to, or a waiver of rights with respect to, any event or condition constituting Good Reason; provided, however, that you must provide a Notice of Termination within ninety (90) days following your knowledge of an event constituting Good Reason or such event shall not constitute Good Reason under this Agreement.

                  (e)         Notice of Termination. Any purported termination of your employment by the Company or by you (other than termination due to death which shall terminate your employment automatically) shall be communicated by written Notice of

7

Termination to the other party hereto in accordance with Section 7. “Notice of Termination” shall mean a notice that shall (i) indicate the specific termination provision in this Agreement relied upon, (ii) to the extent applicable, set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated and (iii) specify the Date of Termination (as defined in Section 4(f)). The failure by you or the Company to set forth in such notice any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any of your or the Company’s rights hereunder or preclude you or the Company from asserting such fact or circumstance in enforcing your or the Company’s rights hereunder.

                  (f)         Date of Termination. “Date of Termination” shall mean (i) if your employment is terminated due to your death, the date of your death, (ii) if your employment is terminated for Disability, the Disability Effective Date, or (iii) if your employment is terminated pursuant to Section 4(c) or (d) or for any other reason (other than death or Disability), the date specified in the Notice of Termination (which, in the case of a termination for Cause shall not be more than thirty (30) days after the date such Notice of Termination is given, and in the case of a termination for Good Reason shall not be less than fifteen (15) nor more than sixty (60) days after the date such Notice of Termination is given), provided that the Company may accelerate the Date of Termination to an earlier date by providing you with notice of such action, or, alternatively, the Company may place you on paid leave during such period.

                  5.         Compensation Upon Termination or During Disability Following a Change in Control. Following a Change in Control during the term of this Agreement, you shall be entitled to the benefits described below during a period of Disability, or upon termination of your employment, as the case may be, provided that such period or termination occurs during the term of this Agreement and within the two (2) year period immediately following the date of such Change in Control. The benefits to which you are entitled, subject to the terms and conditions of this Agreement, are:

                  (a)         During any period during which you fail to perform your full-time duties with the Company as a result of your Disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all compensation payable to you under the Company’s disability plan or program or other similar plan during such period, until your employment is terminated pursuant to Section 4(b) hereof. Thereafter, or in the event your employment is terminated by reason of your death, your benefits shall be determined, paid and provided under the Company’s retirement, insurance and other benefit and compensation programs then in effect in accordance with the terms of such programs.

                  (b)         If your employment shall be terminated (i) by the Company for Cause or (ii) by you other than for Good Reason, the Company shall pay you (1) within thirty (30) days following the Date of Termination a lump sum cash amount equal to the sum of (A) your base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus (B) the unpaid portion, if any, of any annual bonus for any prior year and (2) all other amounts to which you are entitled under any

8

benefit or compensation plan of the Company at the time such payments are due, and the Company shall have no further obligations to you under this Agreement.

                  (c)         If your employment by the Company shall be terminated by you for Good Reason or by the Company other than for Cause or Disability, then you shall be entitled to the benefits provided below:

                   (i)         the Company shall pay to you (1) within ten (10) days following the Date of Termination a lump sum cash amount equal to the sum of (A) your full base salary through the Date of Termination at the rate in effect at the time Notice of Termination is given plus(B) the unpaid portion, if any, of any annual bonus, plus an amount equal to your targeted annual bonus, pro-rated from January 1 of the termination year through the Date of Termination and (2) all other amounts to which you are entitled under any benefit or compensation plan of the Company at the time such payments are due;

                   (ii)        the Company shall pay as severance pay to you within ten (10) days following the Date of Termination a lump sum cash severance payment equal to three (3) times the sum of (1) your annual base salary as in effect as of the Date of Termination or immediately prior to the Change in Control, whichever is greater plus (2)  your targeted annual bonus as in effect as of the Date of Termination or the average annual bonus received by you with respect to the three (3) years immediately prior to the Change in Control, whichever is greater;

                   (iii)       for a period of three (3) years, the Company shall continue to provide you and your eligible family members, based on the cost sharing arrangement between you and the Company in effect on the date of the Change in Control, with medical and dental health benefits at least equal to those which would have been provided to you and them if your employment had not been terminated or, if more favorable to you, as in effect generally at any time thereafter, provided, however, that such benefits shall be secondary to any other coverage obtained by you and provided, further, that if the Company’s welfare plans do not permit such coverage, the Company will provide you and your eligible family members with medical and dental health benefits (with the same after-tax effect) outside of such plans. At the termination of the benefits coverage under the preceding sentence, you and your eligible family members shall be entitled to continuation coverage pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), Sections 601-608 of the Employee Retirement Income Security Act of 1974, as amended, and under any other applicable law, to the extent required by such laws, as if you had terminated employment with the Company on the date such benefits coverage terminates;

                   (iv)       for a period of two (2) years following the Date of Termination, the Company shall, at its sole expense as incurred, provide you with outplacement services, the scope and provider of which shall be selected by you in your sole discretion, at an aggregate cost to the Company not to exceed twenty five percent (25%) of your annual base salary as in effect as of the Date of

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Termination or immediately prior to the Change in Control, whichever is greater; and

                   (v)        you shall be fully vested in your accrued benefits under any qualified or nonqualified pension, profit sharing, deferred compensation or supplemental plans maintained by the Company for your benefit, except to the extent that the acceleration of vesting of such benefits would violate any applicable law or require the Company to accelerate the vesting of the accrued benefits of all participants in such plan or plans, in which case the Company may elect to pay to you within thirty (30) days following the Date of Termination a lump sum cash payment equal to the sum of (1) the value of such unvested accrued benefits in lieu of accelerating the vesting of your benefits plus (2) an amount equal to the amount the Company would have contributed to your account under the Company’s 401(k) plan as a matching contribution had you remained employed by the Company for three (3) years after your Date of Termination and had you made the maximum elected deferral contributions.

          (vi)       (1)         Notwithstanding anything in this Agreement to the contrary, in the event it shall be determined that any payment, award, benefit or distribution (or any acceleration of any payment, award, benefit or distribution) by the Company or any entity which effectuates a Change in Control (or any of its affiliated entities) to or for your benefit (whether pursuant to the terms of this Agreement or otherwise) (“Payments”) would be subject to the excise tax (“Excise Tax”) under Section 4999 of the Code, then the amounts payable to you under this Agreement shall be reduced (reducing first the payments under Section 5(c)(ii), unless you elect an alternative method of reduction) to the maximum amount as will result in no portion of the Payments being subject to such excise tax (“Safe Harbor Cap”). For purposes of reducing the Payments to the Safe Harbor Cap, only amounts payable to you under this Agreement (and no other Payments) shall be reduced, unless consented to by you.

                     (2)         All determinations required to be made under this Section 5(c)(vi) shall be made by the public accounting firm that is retained by the Company to audit the financial statements of the Company as of the date immediately prior to the Change in Control (“Accounting Firm”) which shall provide detailed supporting calculations both to the Company and you within fifteen (15) business days of the receipt of notice from the Company or you that there has been a Payment, or such earlier time as is requested by the Company. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, you may appoint another nationally recognized public accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). If payments are reduced to the Safe Harbor Cap, the Accounting Firm shall provide a reasonable opinion to you that you are not required to report any Excise Tax on your federal income tax

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return. All fees, costs and expenses (including, but not limited to, the costs of retaining experts) of the Accounting Firm shall be borne by the Company. If the Accounting Firm determines that no Excise Tax is payable by you, it shall furnish you with a written opinion to such effect, and to the effect that failure to report the Excise Tax, if any, on your applicable federal income tax return will not result in the imposition of a negligence or similar penalty. In the event the Accounting Firm determines that the Payments shall be reduced to the Safe Harbor Cap, it shall furnish you with a written opinion to such effect. The determination by the Accounting Firm shall be binding upon the Company and you (except as provided in subsection (3) below).

                     (3)         If it is established pursuant to a final determination of a court or Internal Revenue Service (“IRS”) proceeding which has been finally and conclusively resolved, that Payments have been made to, or provided for the benefit of, you by the Company, which are in excess of the limitations provided in this Section 5(c)(vi) (hereinafter referred to as an “Excess Payment”), such Excess Payment shall be deemed for all purposes to be a loan to you made on the date you received the Excess Payment and you shall repay the Excess Payment to the Company on demand, together with interest on the Excess Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of your receipt of such Excess Payment until the date of such repayment. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination, it is possible that Payments which will not have been made by the Company should have been made (an “Underpayment”), consistent with the calculations required to be made under this Section 5. In the event that it is determined (A) by the Accounting Firm, the Company (which shall include the position taken by the Company, or together with its consolidated group, on its federal income tax return) or the IRS or (B) pursuant to a determination by a court, that an Underpayment has occurred, the Company shall pay an amount equal to such Underpayment to you within ten (10) days of such determination together with interest on such amount at the applicable federal rate from the date such amount would have been paid to you until the date of payment.

                  6.         Successors; Binding Agreement.

                  (a)         The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to terminate your employment and receive compensation from the Company in the same amount and on the same terms

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to which you would be entitled hereunder if you terminate your employment for Good Reason following a Change in Control, except that, upon your written request, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. Unless expressly provided otherwise, “Company” as used herein shall mean the Company as defined in this Agreement and any successor to its business and/or assets as aforesaid.

                  (b)         This Agreement shall inure to the benefit of and be enforceable by you and your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder had you continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your estate.

                  7.         Notice. For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

                  8.         Confidentiality and Non-Solicitation Covenants.

                  (a)         Confidentiality. You hereby agree that commencing on the Date of Termination, you shall not, directly or indirectly, disclose or make available to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, any Confidential Information (as defined below). You agree that, upon termination of your employment with the Company, all Confidential Information in your possession that is in written or other tangible form (together with all copies or duplicates thereof, including computer files) shall be returned to the Company and shall not be retained by you or furnished to any third party, in any form except as provided herein; provided, however, that you shall not be obligated to treat as confidential, or return to the Company copies of any Confidential Information that (i) was publicly known at the time of disclosure to you, (ii) becomes publicly known or available thereafter other than by any means in violation of this Agreement or any other duty owed to the Company by any person or entity or (iii) is lawfully disclosed to you by a third party. As used in this Agreement, the term “Confidential Information” means: information disclosed to you or known by you as a consequence of or through your relationship with the Company, about the customers, employees, business methods, public relations methods, organization, procedures or finances, including, without limitation, information of or relating to customer lists, of the Company.

                  (b)         Non-Solicitation. You hereby agree that, for the period commencing on the Date of Termination and terminating on the first anniversary thereof, you shall not, either on your own account or jointly with or as a manager, agent, officer,

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employee, consultant, partner, joint venturer, owner or shareholder or otherwise on behalf of any other person, firm or corporation, directly or indirectly solicit or attempt to solicit away from the Company any of its officers or employees or offer employment to any person who is an officer or employee of the Company; provided, however, that a general advertisement to which an employee of the Company responds shall in no event be deemed to result in a breach of this Section 8(b).

                  9.         Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Utah without giving effect to its conflicts of laws rules.

                  10.        Joint and Several Liability. Any successors or assigns shall be jointly and severally liable with the Company under this Agreement.

                  11.        Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing and signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. The section headings contained in this Agreement are for convenience only, and shall not affect the interpretation of this Agreement.

                  12.        Withholding Taxes. The Company may withhold from all payments due to you (or your estate) hereunder all taxes which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

                  13.        Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

                  14.        Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

                  15.        Legal Fees. In addition to all other amounts payable to you under this Agreement, the Company shall pay to you all legal fees and expenses incurred by you in connection with any dispute arising out of or relating to this Agreement or the interpretation thereof (including, without limitation, all such fees and expenses, if any, incurred in contesting or disputing any termination of your employment or in seeking to obtain or enforce any right or benefit provided by this Agreement, or in connection with any tax audit or proceeding to the extent attributable to the application of Section 4999 of the Code to any payment or benefit provided hereunder), regardless of the outcome of such proceeding; provided, however, that you

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shall not be entitled to recover such fees and costs if the court or other tribunal or body hearing the dispute determines that you brought the claim in bad faith or that the claim was frivolous.

                  16.        At-Will Employment. Nothing in the foregoing diminishes or alters the Company’s policy of at-will employment for all employees, where both the Company and you may terminate the employment relationship at any time and for any reason, with or without cause or notice. If your employment with the Company shall terminate prior to a Change in Control, you shall have no further rights under this Agreement; provided, however, that any termination of your employment during the term of this Agreement and within the two (2) year period immediately following a Change in Control shall be subject to all of the provisions of this Agreement.

                  17.        Full Settlement. The Company’s obligation to make any payments provided for in this Agreement and otherwise to perform its obligations hereunder shall be in lieu and in full settlement of all other severance payments to you under any other severance agreement between you and the Company, and any severance plan of the Company. The Company’s obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against you or others. In no event shall you be obligated to seek other employment or take other action by way of mitigation of the amounts payable to you under any of the provisions of this Agreement and, except as provided in Section 5(c)(iii), such amounts shall not be reduced whether or not you obtain other employment.

                  18.        Survival. The respective obligations and benefits afforded to the Company and you as provided in Sections 3, 5 (to the extent that payments or benefits are owed as a result of a termination of employment that occurs during the term of this Agreement), 6, 8, 12, 15 and 17 shall survive the termination of this Agreement.

                  19.        Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto, and any prior agreement of the parties hereto in respect of the subject matter contained herein, including, without limitation, any prior severance agreements, is hereby terminated and cancelled. Except as otherwise specifically provided in this Agreement, any of your rights hereunder shall be in addition to any rights you may otherwise have under benefit plans or agreements of the Company to which you are a party or in which you are a participant, including, but not limited to, any Company sponsored employee benefit plans and stock options plans and provisions of this Agreement shall not in any way abrogate your rights under such other plans and agreements.

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                  If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter, which shall then constitute our agreement on this subject.

Sincerely, ZIONS BANCORPORATION
By:
Its:	Chairman and CEO

Agreed to this 19th day
of August, 2002.

[Name]

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